Despite interventions by Brazil's Central Bank, the BC, which for three times tried to contain the bullish streak of the American greenback, the US dollar gained 3.46% this Wednesday, December 3, closing the day at 2.475 Brazilian reais against the dollar. Meanwhile, a new report shows foreign investors leaving Brazil heavily in November.
This week alone, the American currency accumulated gains of almost 7%. For the whole year, up to now, the dollar appreciated 39.3% in relation to the real. This Wednesday's exchange rate was the highest since June 2005.
The dollar advance coincided with a report showing foreign investors taking their money out of Brazil. According to Brazil's Central Bank, US$ 7.15 billion were taken out of the country in November, the biggest amount of dollars withdrawn since January 1999, when US$ 8,58 billion left Brazil.
São Paulo's stock exchange, the Bovespa, closed with a slight increase of 0.91% after a day filled with oscillations. During the trading session, the Ibovespa, Bovespa's main index, varied from minus 3.3% to plus 1.15%. Volume was a low 3.42 billion reais (US$ 1.38 billion).
The market's swinging mood reflected in part the international high spirits mainly in Wall Street and European stock markets.
On the down side, the Brazilian market declined after news that Brazil's mining company Vale, former known as Vale do Rio Doce, had laid off 1,300 employees and announced that 5,500 workers would go on collective vacation due to low demand for its goods. Vale's shares still went up 0.22%.
At the end of October, Vale had already informed that it intended to reduce the production of iron ore production and other ores and byproducts in the states of Minas Gerais, Rio de Janeiro and Amapá, besides industrial plants and mines abroad. Plants in China, Indonesia, Norway and France will have their production also curtailed. Vale has 62,000 employees all over the world.
Roger Agnelli, the company's president, explained that the cut of 30 million metric tons, annually, in the iron ore production is a "momentary adjustment" in response to the "very heavy shake-out" the world is undergoing due to the international financial crisis.
The Brazilian steel group Gerdau informed that it will anticipate stoppage of its subsidiaries Açominas and Siderperú (Empresa Siderúrgica del Peru) for maintenance work. As admitted by the company, the measure's intention is to reduce production when worldwide demand for steel, from automakers and building contractors among others, has been reduced.
The president of the group, André Gerdau Johannpeter, acknowledged that Gerdau may take similar steps in other plants especially in the United States and in some Latin America countries. The company is expecting a 24% contraction in the last quarter of 2008 when compared to the same period last year.
