Dollar rises against the real after bad inflation data in the US; Ibovespa has a slight drop

Despite having lost strength during the afternoon, the spot dollar closed on Thursday, the 25th, higher against the real, driven by worse-than-expected US inflation data, which reinforced bets that the Federal Reserve should promote fewer interest cuts this year.

The dollar in cash closed the day at R$5.1651 on sale, up 0.31%. In April, the US currency accumulated an increase of 2.98%. See the dollar exchange rate today.

Meanwhile, the Brazilian stock market reference index, Ibovespa, fell 0.08%, to 124,645.58 points. At the day’s high, the Ibovespa reached 124,731.65 points. At the minimum, at 123,702.89 points. The financial volume in the trading session totaled R$21.27 billion.

External scenario

Investors began the day waiting for the Department of Commerce to release the first preview of the US Gross Domestic Product for the first quarter and the PCE index that accompanies the GDP report, looking for clues about the Federal Reserve’s next steps. in monetary policy.

When the numbers came out, at 9:30 am (Brasília time), Treasury yields plummeted at first, with the information that GDP grew at an annualized rate of 1.6% in the first quarter — below 2.4% of growth projected by economists consulted by Reuters. This meant that, in Brazil, the spot dollar also plummeted, reaching a low of 5.1123 reais (-0.72%) at 9:30 am.

In the next minute, however, yields jumped into positive territory and began to reach new highs in the session, which made the dollar also gain strength against several currencies, including the real. Behind the turnaround were bad inflation numbers: core PCE rose 3.7% in the first quarter, above expectations of a 3.4% rise.

“Inflation was very bad, so the dollar reacted and reached 5.19 reais”, commented Jefferson Rugik, director of Correparti Corretora, remembering that the data reinforced the perception that the Federal Reserve tends to promote fewer interest cuts in 2024 — which, in theory, favors the North American currency.

At 10:14 am, after the inflation figures, the dollar in cash registered a peak of R$5.1943 (+0.88%).

During the afternoon, however, yields lost strength in the US, as did the US currency against most other currencies, which also placed the dollar at lower levels in Brazil. Investors are now awaiting the release of the monthly PCE index on Friday, the Fed’s preferred data for its monetary policy decisions.

Indoor scenario

The strong influence from abroad on assets in Brazil left domestic news in the background this Thursday. The Ministry of Finance gave details about the proposal to regulate the tax reform, and the president of the Chamber of Deputies, Arthur Lira (PP-AL), stated that the definition of the rapporteur for the matter should take place this week.

In the afternoon, the BC reported that Brazil recorded a total positive foreign exchange flow of 165 million dollars in April until the 19th, with net outflows of 8.400 billion dollars through the financial channel and inflows of 8.564 billion dollars through the commercial channel.