Good morning, foreign exchange market, and a wonderful month of April to all! The cash price closed the last day of March at R$5.0154 for sale, as reported by the brokerage firm Getmoney. The accumulated appreciation of the dollar in the first quarter was 3.34%. The last trading session of last month was marked by an atmosphere of risk aversion and volatility.
The dispute surrounding the closing of the last Ptax rate of the month caused the North American currency to rise above R$5.00. Furthermore, comments from Christopher Waller, director of the Fed, that there is no rush to cut interest rates in the US at this time gave a boost to the exchange rate.
We can attribute this strong dollar situation in the world to bets on when the initial interest rate cut will take place in the US and the magnitude of monetary relief expected for this year. Last year, the forecast was a 1.5% interest rate drop in 2024 there and starting in March. At this moment, the market is already talking about a maximum of 0.75% and starting in June. The higher the interest rates there, the stronger the dollar becomes.
On Friday, with markets closed for the Good Friday holiday, Jerome Powell, chair of the Fed, said that he does not think it is appropriate to cut interest rates until they gain confidence that US inflation is on a sustained downward path. For him, it is possible to wait a little longer for the interest rate cut to begin, so there is no risk of a spike in inflation.
For this week, we will have US labor market data on the agenda, and the exchange rate should react to this expectation. In today’s economic calendar we will have the Focus Bulletin and industrial and global PMIs for March here in Brazil. In the US, February construction spending and March industrial PMI. Several countries are on Easter holidays today.
Good business to everyone and lots of profit!
