Dollar falls against the real in line with the exterior; market awaits Fed By Reuters

By Luana Maria Benedito

SÃO PAULO (Reuters) – The currency fell against the real this Monday, following the weakness of the US currency abroad following possible intervention by Japanese authorities in the foreign exchange market, while investors continued to wait for the Federal Reserve’s monetary policy decision .

At 10:20 am (Brasília time), the spot dollar fell 0.1%, to 5.1119 reais on sale. At B3 (BVMF:), the first maturity contract fell 0.12%, to 5.119 reais.

The Japanese yen surged sharply against the dollar on Monday, with traders citing a heavy dollar-selling intervention by Japanese banks for the first time in 18 months, after the yen hit new 34-year lows earlier in the year. day.

The dollar fell sharply and suddenly to 155.01 earlier, coming off a peak of 160.245. Banking sources said Japanese banks had sold dollars for yen.

“With this intervention and the consequent strengthening of the yen, the currency weakened in the international market. As a result, there is a global weakening trend for the dollar, also accompanied by a slight reduction in Treasury yield rates, which helps the appetite for risky assets and helps the appreciation of other currencies against the American currency”, said Leonel Oliveira Mattos, market intelligence analyst at StoneX.

The dollar index – which measures the performance of the US currency against a basket of six currencies, fell 0.14%, to 105.810, this morning, despite caution regarding the Federal Reserve’s monetary policy meeting .

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On Wednesday — when it will be a holiday in Brazil — the US central bank will probably maintain its basic interest rate, and traders will be attentive to the Fed’s tone on the possibility and timing of interest cuts.

Recently, a series of stronger than expected data postponed market expectations about the timing of the first interest rate cut in the US. Bets that were previously concentrated in March were moved to May, then June and July and, currently, are concentrated between September, November and December.

Higher interest rates in the US play in favor of the dollar, as they make US yields more attractive to foreign investors.

On Friday, the U.S. nonfarm employment report will come into investors’ focus as it could provide more clues about the health of the economy and the need for rate cuts.

In the last session, the US currency in cash closed down 0.94%, at 5.1168 reais on sale.