The dollar soared in Brazil this wednesday and the Brazilian real hit a historic low, touching 6 reaisbefore the presentation of a fiscal package, which will include taxing the super rich and exempt from income tax people who earn up to 5,000 reais per month.
The Brazilian currency devalued 2.1% to 5.934, while the Bovespa gave up 1.6%.
At a press conference in Brasilia, the Brazilian Minister of Labor, Luiz Marinho, He also said that the content of the package that the Minister of Finance will announce tonight, Fernando Haddad-on radio and television- will be “completely different” from what had been rumored.
When asked if the income tax exemption for salaries of up to 5,000 reais will be in the fiscal package, Marinho responded: “Everything will be there. Super salaries, taxes for the super rich, everything will be there. A complete package.”
Without detailing how the measures will be applied, the Minister of Labor said that It will not be a “pure and simple” spending cut package and there will be no changes to the rules for granting unemployment insurance.
The rest of the region’s currencies are also devalued
At the regional level, on the other hand, concern persisted among investors about the tariffs that may be imposed donald trump when he assumes the presidency of the United States.
The US currency hit one-week lows and fell around 0.6% against the basket of six currencies that make up the dollar index. as investors became wary of Trump’s tariff threats as they rebalanced their portfolios before the end of the month.
Meanwhile, the United States Department of Labor reported a drop in the number of people who applied for unemployment benefits last week, which, added to other positive data, supported expectations of an interest rate cut by the Federal Reserve (Fed) at its December meeting. “The data indicates that the Fed will cut rates again in December, which should boost the region’s currencies, but Trump’s comments about raising tariffs have created a certain amount of uncertainty and caused high volatility in the markets” said an operator.
In this framework, the Mexican peso was quoted at 20.62 per dollar, with an increase of 0.2%, cutting losses from the previous wheel.
Trump, who will take office on Jan. 20, 2025, said he would impose a 25% tariff on imports from Canada and Mexico until they clamp down on drugs and migrants crossing the border, a move that would appear violate a free trade agreement.
The main stock index S&P/BMV IPC, which makes up the 35 most liquid companies in the Mexican market, rose one 0.2%, to 49,834.97 units.
Instead, The Chilean peso rose 0.1%, to 977.47 per dollar, supported by a rebound in copper prices, the country’s main export. Meanwhile, the leading index of the Santiago Stock Exchange, the IPSArose 0.4%, to 6,582.10 units. The prices of copper They rose on Wednesday on the support of a weaker dollar and revived bets that top metals consumer China would launch more stimulus to support its economy and offset risks of U.S. tariffs.
He colombian peso advanced a moderate 0.4%, to 4,403.05 units per dollar; while in the stock market the stock index MSCI COLCAP advanced a 1.5%, to 1,397.49 points. Colombia will announce a total spending cut of 28.4 trillion pesos (6,445 million dollars) in this year’s budget, due to lower-than-expected income that puts public finances in trouble, two government sources said on Wednesday. .
The Peruvian currency, the sol, depreciated 0.4%, to 3.76 units per dollar. Meanwhile, the benchmark of the Lima Stock Exchange gave 0.5%, to 29,779.03 points.
Source: Ambito
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