Dollar rises driven by foreign exchanges and ends quarter above R$5 By Reuters

By Fabricio de Castro

SÃO PAULO (Reuters) – The cash price closed on Thursday above 5 reais, in line with the almost generalized advance of the US currency abroad, in a session also marked by the dispute among investors in the domestic market over the formation of the Ptax rate the last day of the month and quarter.

The dollar in cash closed the day at 5.0156 reais on sale, up 0.70%. Since March 18, when it closed at 5.0254 reais, the US currency has not ended the day above the psychological line of 5.00 reais.

In March, the US currency accumulated an increase of 0.88% and, this week, an increase of 0.34%.

At 5:27 pm, on B3 (BVMF:), the May contract rose 0.56%, to 5.0305 reais on sale.

Due to Friday’s holiday, this Thursday’s session was the last of the month and quarter, which brought investors interested in the formation of Ptax to the business.

Ptax is an exchange rate calculated by the Central Bank based on spot market quotations and which serves as a reference for the settlement of futures contracts. At the end of each month, financial agents usually try to direct it to levels that are more convenient for their positions, whether they are purchased (in the direction of rising prices) or sold in dollars (in the downward direction).

The dispute over Ptax put the spot dollar close to stability at the end of the morning, with short sellers trying to hold on to prices, despite upward pressure from abroad. At 11:11 am, the spot dollar reached a minimum exchange rate of 4.9798 reais (-0.01%).

After the formation of Ptax in the early afternoon (at 4.9962 reais for sale), the dollar became freer to fluctuate and accelerated gains, in line with the exterior.

Abroad, the US currency rose against most other currencies following statements made the day before by a Federal Reserve official.

On Wednesday night, Fed Director Christopher Waller said there is “no rush” to cut US interest rates at this time. Furthermore, he pointed out that delaying the start of rate cuts will likely affect the easing that will occur in 2024.

“It is appropriate to reduce the overall number of rate cuts or push them further into the future in response to recent data,” Waller said.

Waller’s comments, considered tough on inflation, gave strength to the dollar, including in relation to the real. At 4:45 pm, the spot dollar reached a maximum of 5.0191 reais (+0.78%).

“The perception of the resilience of the US economy permeated the trading session early on, cooling the prospect of a sharper cut in interest rates there a little more”, commented the director of foreign exchange consultancy FB Capital, Fernando Bergallo.

At 5:24 pm, the — which measures the performance of the US currency against a basket of six currencies — rose 0.13%, to 104.560.

In addition to abroad, investors in Brazil monitored the release of the BC Inflation Report and the press conference by the institution’s president, Roberto Campos Neto, held in São Paulo.

In the document, the monetary authority reiterated the most recent warnings about inflation in Brazil and raised the growth projection for Gross Domestic Product (GDP) in 2024 from 1.7% to 1.9%.

In the morning, the BC sold all 16,000 traditional currency swap contracts offered to roll over June maturities.