The dollar left the uncertainty seen during most of the trading session and started to fall sharply against the real this Thursday, in line with the weakness of the US currency abroad and with the rise of the Ibovespa in the wake of the Central Bank’s decision to maintain the Selic rate unchanged and the market’s understanding that the monetary tightening cycle is over.
At 15:06 (Brasília time), the spot dollar retreated 0.70%, to 5.1378 reais on sale.
After falling 1.01%, at 5.1218 reais, at the lowest of the day, reached shortly after the opening of business, the US currency gained some strength throughout the morning and rose by 0.24%, at 5 .1863 reais, before re-operating firmly in the red in the afternoon.
On B3, at 15:06 (GMT), the first-maturity dollar futures contract was down 0.71% to 5.1465 reais.
Behind this drop, market participants pointed to the dollar’s weakness abroad, especially against emerging market currencies or exposed to commodities. Colombian and Mexican pesos, Peruvian sol, South African rand and Australian dollar – currencies with which the real maintains some correlation – rose between 0.3% and 0.9% against the US currency this afternoon.
An index measuring the dollar’s performance against a basket of strong pairs was down 0.24% to 111.200.
Meanwhile, in Brazil, the Central Bank decided the day before to keep the Selic rate at 13.75% per year, interrupting an aggressive cycle of monetary tightening, but considered that it will not hesitate to resume interest rate hikes if the reduction in inflation does not take place. as expected.
Lucas Carvalho, chief analyst at Toro Investimentos, told Reuters that local markets reacted positively to the Monetary Policy Committee (Copom) statement, with the Ibovespa benefiting from the interruption in the Selic increase and the inflow of resources into the São Paulo stock exchange – -which requires the purchase of reais by foreign agents– consequently providing support to the local exchange market.
The Ibovespa rose 1.26%, to 113,347.55 points, at 15:05 (Brasília time).
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