The dollar was close to stability against the real this Tuesday, in line with the external relief regarding the prospects for monetary easing in the United States, while, in Brazil, the focus was on the pace of Selic reduction to be adopted by the Central Bank in your meeting this week.
At 9:40 am (Brasília time), the spot dollar fell 0.06%, to 5.0719 reais on sale. On B3, the first-month dollar futures contract rose 0.01%, to 5.086 reais.
“We are still in a defining scenario, in a way, after that strong rise (in the dollar) that we had at the end of April”, said Thiago Lourenço, operator at Manchester Investimentos.
He highlighted a correction movement in the markets since the dollar jumped to year-to-date peaks last month, but considered that the dollar has found some resistance to continue falling.
“We have to monitor the development of the next information regarding monetary policy in the United States, this should define how the price dynamics will be”, added Lourenço.
A weaker-than-expected US labor market report last week fueled bets that the US central bank will ease monetary policy later this year, with traders predicting around two rate cuts by the end of 2024 .
Before the employment data, the view was much more pessimistic, with only one adjustment in interest rates expected — and with part of the markets even ruling out changes in monetary policy.
Abroad, the index that compares the dollar to a basket of strong pairs was close to stability.
In Brazil, the expectation was for the meeting of the Monetary Policy Committee (Copom) of the Central Bank, which will begin its two-day meeting this Tuesday to define interest rates.
The weekly Focus bulletin and interest rate futures contracts show the prospect of reducing the pace of the Selic cut to 0.25 percentage points. The majority of economists consulted in a Reuters survey also believe in a slowdown to 0.25 points, although a significant number believe in maintaining the 0.50 point step seen in the last six meetings.
In general, the more the Federal Reserve cuts interest rates and the less the BC loosens local monetary policy, the better for the real, due to the effect on returns for fixed income investors.
However, many market participants have warned that, if the BC’s eventual decision to slow down easing is motivated by high fiscal uncertainties, this could nullify the positive effect for the real, since the health of public accounts is also a factor taken into account. consideration for investment decisions.
Márcio Riauba, manager of StoneX’s operations desk, said that the damage in Rio Grande do Sul caused by the rains, in addition to being a humanitarian tragedy, is a factor that contributes to fiscal uncertainty — amid the government’s mobilization to provide assistance to the State– and also for inflationary uncertainty–since the production of many inputs was affected.
The president of the Senate, Rodrigo Pacheco (PSD-MG), indicated this Tuesday that the draft legislative decree that recognizes the state of calamity in Rio Grande do Sul must be approved. The legislative decree paves the way for the sending of federal resources to the State without this affecting the government’s fiscal target.
The number of deaths caused by the devastating rains that hit Rio Grande do Sul last week rose to 90 and another four deaths are under investigation, while 132 people remain missing, the State Civil Defense reported in a statement released this Tuesday morning .
According to the organization’s statement, 388 municipalities were affected by the climate events, more than two thirds of the cities in Rio Grande do Sul, in addition to more than 155,000 people being displaced and 361 injured.
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