Dollar remains outward and advances ahead of series of comments from Fed officials

By Luana Maria Benedito

SÃO PAULO (Reuters) – The dollar rose against the real this Friday, in line with external caution, as investors continued to reflect strong data from the United States and also waited for speeches from Federal Reserve authorities.

At 10:30 am (Brasília time), the dollar in cash rose 0.28%, to 4.9936 reais on sale, after earlier having surpassed 5 reais. On B3, the first-month dollar futures contract rose 0.52%, to 5.002 reais on sale.

“The dollar is on the rise globally, and the situation is no different in relation to the Brazilian real, where the appreciation is a little more consistent,” said Diego Costa, head of foreign exchange for the North and Northeast at B&T Câmbio.

This morning, the dollar index — which measures the performance of the US currency against a basket of six currencies, rose 0.28%, to 104.280.

“Investors are looking for guidance in speeches from central bank officials as they await the release of the minutes of the latest monetary policy decisions, where we can gain a clearer understanding of the reasons behind the latest decision and future prospects.”

Speaking this Friday, the chair of the Federal Reserve, Jerome Powell, did not make any comments about the outlook for interest rates, so the focus was on other central bank authorities who will speak throughout the session: the vice -chair, Philip Jefferson; vice chair for oversight, Michael Barr; Atlanta Fed President Raphael Bostic; and director Michelle Bowman.

The day before, the U.S. Department of Labor reported that the number of people filing new claims for unemployment benefits unexpectedly fell last week, suggesting that job growth remained strong in March. At the same time, PMI data showed that US business activity remained stable in March, but prices rose across the board, suggesting that inflation may remain elevated.

“These numbers signal the strength of the American economy,” said Levante Investimentos in a note to clients.

“Fears about the resilience of inflation in the United States have led to the compression of the interest rate differential with Brazil, which contributes to increasing the perception that interest rates in Brazil may be higher than expected, at least in the short term “, concluded Levante, adding that, in this contradictory scenario, volatility tends to increase in the coming months.

In Brazil, the Central Bank decided on Wednesday to make a further reduction of 0.50 percentage points in the Selic rate, to 10.75% per year, and shortened its indication on future cuts by citing an increase in uncertainties, stating that its The board expects cuts of the same intensity only at the next meeting, in May.

The Copom’s greater caution confirms that there is no possibility of the terminal Selic rate remaining below what is currently projected by the markets — something that would be detrimental to the real.

The day before, the US currency in cash advanced 0.11%, to 4.9797 reais on sale.