O dollar spot price rose this Monday, the 18th, for the third consecutive session in the domestic foreign exchange market and closed again above R$5.00 for the first time since the end of October last year. The firm rise in Treasury rates, on the eve of the Federal Reserve’s (Fed, the North American central bank’s) monetary policy decision, punished emerging currencies. Latin American currencies from high-interest rate countries, which posted robust gains against the dollar last year, suffered the most.
O real, which usually suffers more in episodes of global dollar strengthening, this time had smaller losses than those of the Mexican peso. In addition to the so-called “Super Wednesday”, on the 20th, with a decision by the Fed and the Monetary Policy Committee (Copom) of the Central Bank, on Thursday, the 21st, there is a meeting of the Central Bank of Mexico (Banxico), which could initiate a interest rate cut cycle, currently at 11.25%.
At the beginning of business, the dollar exchange rate it even retreated in relation to the real, amid the appreciation of commodities with positive data from China and the result of the Central Bank’s Economic Activity Index (IBC-Br) in January – which reiterates the perception that the economy is stronger at the beginning of the year and suggests a more cautious stance from the BC in the interest rate cut process. There is speculation that the Copom may abandon the “forward guidance” of cuts of around 0.50 percentage points this week in the next meetings.
The tide turned with the change of sign of Treasuries interest rates, which renewed highs in the afternoon. With a minimum of R$4.9844 and a maximum of R$5.0254, the dollar in cash closed up 0.56%, quoted at R$5.0259 – the highest closing value since October 31st of last year (R$5.0414).
Dollar accumulates high in March and in the year
As this Monday progresses, the US currency starts to accumulate an increase of 1.06% in March. For the year, gains are 3.56%. Liquidity was strong for an opening week. The main thermometer of business appetite, the future dollar for April, turnover of more than US$ 13 billion.
“The market is increasingly pessimistic about the possibility of the Fed starting to cut interest rates this semester, and this is pushing up Treasury rates and the global appreciation of the dollar”, says the chief economist at Frente Corretora, Fabrizio Velloni, for whom the North American BC may push the beginning of the base rate reduction to the second half of the year, given the recent readings of inflation indices.
It is taken for granted that the Fed will announce this week that interest rates will remain in the range between 5.25% and 5.50%. Attention turns to the directors’ projections for economic indicators and the base rate at the end of the year, in the so-called dot chart, in addition to the interview with chairman Jerome Powell.
Monitoring by the CME Group shows that the chances of a reduction in interest rates in June, which at the beginning of the month exceeded 70% and last Friday were almost 60%, are now just above 50%.
Behavior thermometer dollar Against a basket of six strong currencies, the DXY index operated slightly higher throughout the day, reaching a maximum of 103,649 points. The yen behaved unstable against the US currency, amid expectations that the Central Bank of Japan (BoJ) could take, this Tuesday, the first step towards ending the era of interest rates. negative interest rates.
With Estadão Content
