Dollar today closes practically stable for the 2nd session in a row before Copom

The dollar closed practically stable against the real for the second consecutive session, with investors remaining cautious about the size of the cut in the basic Selic interest rate on Wednesday, when the Monetary Policy Committee (Copom) meeting ends.

Elsewhere, abroad, the US currency rose against most currencies on Tuesday, gaining ground steadily throughout the day as investors digested the latest comments from members of the Federal Reserve (Fed) ​on the possible path of interest rates.

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What is the dollar exchange rate today?

The spot dollar fell 0.12%, to R$5.067 on purchase and R$5.067 on sale. At 5:35 pm (Brasília time), the first-month dollar futures contract fell 0.12%, equivalent to 5,079 points.

The Central Bank held an auction of up to 12 thousand traditional currency swap contracts in this session for the purpose of rolling over the maturity date of July 1, 2024.

Commercial dollar

Sale: R$5,067

Purchase: R$5,081

Tourism dollar

Sale: R$5,281

Purchase: R$ 5,101

Read more: Types of dollars: find out the main ones and the importance of the currency

The expectation before the decision of the Central Bank of Brazil, tomorrow (8), 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 Selic rate, currently at 10, 75% per year.

As a result, the American currency fluctuated within very narrow margins in Brazil, varying between the maximum exchange rate of R$ 5.0855 (+0.21%) at 9:30 am and the minimum exchange rate of R$ 5.0492 (-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.

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.

(With Reuters)