São Paulo, Brazil – The Brazilian real strengthened against the US dollar on Friday, closing at 5.244 reais per dollar, a nearly 1% decrease from its morning high of 5.31 reais. The currency’s recovery came amid a volatile trading day influenced by escalating tensions in the Middle East and slowing economic data from the United States, according to reports from Agência Brasil.
The dollar’s earlier surge above 5.30 reais reflected investor anxieties over the intensifying conflict in the Middle East. Yet, a shift occurred as investors capitalized on the higher price to sell off their dollar holdings. Contributing to this reversal were indications of a decelerating US economy, prompting a reassessment of risk appetite.
Despite Friday’s gains, the US dollar still registered a 2.08% increase against the real for the first week of March. Year-to-date, the dollar has experienced a 4.51% decline relative to the Brazilian currency.
Brazil’s stock market, the Ibovespa, continued its downward trend, falling 0.61% to close at 179,365 points. This marked the worst weekly performance for the Ibovespa since June 2022, coinciding with the initial stages of the Russia-Ukraine war. The index declined by 4.99% over the week.
A notable exception to the market downturn was Petrobras, whose shares rose sharply. This increase was driven by the surge in global oil prices – exceeding $90 a barrel and climbing nearly 30% since the start of the recent conflict – and a nearly 200% increase in the state-owned oil company’s annual profits. Petrobras ordinary shares increased by 4.12% to 45.78 reais, even as preferred shares gained 3.49% to 42.11 reais.
The rising oil prices are linked to concerns over potential disruptions to supply routes, particularly the Strait of Hormuz, through which approximately 20% of the world’s oil passes. The possibility of a blockade of this crucial waterway continues to fuel market uncertainty.
