By Fabricio de Castro
SÃO PAULO (Reuters) – The spot ended Tuesday practically stable against the real, for the second day in a row, in a session in which the US currency fluctuated within narrow margins, with investors cautious about the size of the base rate cut Selic on Wednesday, when the Copom meeting ends.
The US currency in cash closed the day at 5.0681 reais on sale, a slight drop of 0.13%. In May, the currency accumulated a drop of 2.40%.
At 5:04 pm, on B3 (BVMF:) the first maturity contract fell 0.14%, to 5.0785 reais on sale.
The expectation before the decision of the Monetary Policy Committee (Copom) of the Central Bank, on Wednesday, brought business back to a halt in Brazil this Tuesday, with investors positioned on the exchange rate and future interest rates cautious before the announcement on the rate. basic Selic, currently at 10.75% per year.
As a result, the spot dollar fluctuated within very narrow margins in Brazil, varying between the maximum exchange rate of 5.0855 reais (+0.21%) at 9:30 am and the minimum exchange rate of 5.0492 reais (-0.51%) at 11:54 am.
“The market is on hold, and this time a little cautious regarding the size of the cut that comes tomorrow (Wednesday). I don’t see any Treasury positioning itself today, the day before, as usually happens”, commented the director of exchange consultancy FB Capital, Fernando Bergallo, in the afternoon.
In the interest curve, the majority pricing points to a 25 basis point cut for the Selic this Wednesday, with a minority positioning itself at a 50 basis point cut.
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Professionals interviewed by Reuters assessed that, if the cut is 25 basis points, as priced, the effects on the exchange rate tend to be smaller. This is because the interest rate differential between Brazil and abroad will not close as much, largely maintaining the country’s attractiveness to international capital.
A cut of 50 basis points, in turn, tends to generate greater adjustments, both in the exchange rate and in the DIs (Interbank Deposits) curve.
Abroad, the dollar rose against most other currencies this Tuesday, contrary to what was seen in Brazil. At 5:13 pm, the — which measures the performance of the US currency against a basket of six currencies — rose 0.20%, to 105.360.
In the morning, the BC sold all 12,000 traditional currency swap contracts offered to roll over July maturities.
