02/Apr 17:47
By Antonio Perez / Estadão
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Despite the intervention of the Central Bank, with the sale of US$ 1 billion in foreign exchange swaps, and the global retreat of the dollar, the real showed very little strength in the session this Tuesday, 2. Operators affirm that the search for exchange rate protection in the segment future, due to technical factors and domestic political noise, harm the performance of the Brazilian currency.
With a minimum of R$5.0231 in the morning and a maximum of R$5.0628, the spot dollar ended at R$5.0583, practically stable (-0.02%). After rising 3.34% in the first quarter, the currency appreciated by 0.86% in the first two trading sessions of April, which takes the accumulated gains for the year to 4.22%.
Real had, by far, the worst performance among its peers. The Chilean and Colombian pesos rose more than 0.90% against the dollar, while the Mexican peso showed gains of around 0.30%. A thermometer of the American currency’s performance in relation to a basket of six strong currencies, the DXY index fell around 0.20%, but remained at a high level, around 104.800.
“The performance of the real is worrying. There is the technical issue, but also the perception of a worsening in the quality of economic policy and the attempt to interfere in companies, which increases the perception of risk”, says the chief economist at Nova Futura Investimentos, Nicolas Borsoi, highlighting that growth fears that the government will increase spending after the fall in popularity of the President of the Republic, Luiz Inácio Lula da Silva.
On the technical side, the real is pressured by the maturity, on April 15, of more than US$ 3.5 billion in NTN-s A3, securities adjusted by the variation in the selling price of the dollar. In practice, anyone who holds these shares is “bought in dollars”. When bonds mature, holders can go to the market to rebuild their position, which increases demand for purchases in the futures market.
On Monday, in the announcement of the additional foreign exchange swap auction, the BC informed that it would act to meet the “demand for foreign exchange instruments resulting from the effects of the redemption of NTN-A3”. The entry of a relevant buyer could generate dysfunctions in the market and cause a spike in the exchange rate. If the global environment were a weak dollar, perhaps the effects of the NTN-A3 maturity would be absorbed without any problems by the foreign exchange market.
“The Central Bank placed US$1 billion in swaps today. As the maturity of the NTN is more than US$3.5 billion, it is likely that it will enter the market again to meet this demand. The market must try the BC’s patience”, says Borsoi.
Despite the decline in the DXY index this Tuesday, the global environment is still one of a strong dollar and Treasury rates at high levels. The 10-year T-note rate rose more than 1% this Tuesday and, at its maximum, touched the level of 4.40%, the highest level since November 2023.
Data released this Tuesday attested to the strength of the North American economy. US industrial orders rose 1.4% in February, above analysts’ expectations. The Jotts employment report showed that job openings increased from 8.748 million in January to 8.756 million in February, practically in line with expectations (8.770 million).
With the right to vote on monetary policy decisions in the US, the president of the Cleveland Federal Reserve (Fed, the US central bank), Loretta Mester, stated that she needs more signals about the trajectory before deciding to cut interest rates – and that it does not expect to have the necessary level to make such a decision at the Fed meeting scheduled for May 1st.
