The spot dollar closed lower against the real on Tuesday, moving away slightly from the 5.00 reais mark, in line with the global search for risk assets following the recent advances of the US currency, driven by data and statements from authorities indicating that the Federal Reserve should start cutting interest rates only further ahead.
The spot dollar closed the day priced at 4.9630 reais for sale, down 0.38%. In February, the currency has accumulated a gain of 0.50%.
At B3, at 17:21 (Brasília time), the first maturity future dollar contract fell 0.53%, at 4.9705 reais.
The dollar fluctuated downwards for practically the entire session, mainly influenced by the decline in Treasury yields, which also weighed on the US currency quotes against other currencies abroad.
At the day’s peak, the spot dollar marked 4.9820 reais (stable) at 11:30 a.m., and at the low, it reached 4.9514 reais (-0.61%) at 2:28 p.m.
Professionals interviewed by Reuters said that the day was about adjustments, with investors seeking higher risk assets after recent pessimism.
“In recent days, with the (monetary policy) decision of the Fed last week, the dollar ended up appreciating, with a pessimistic sentiment in the markets,” recalled Felipe Izac, partner at Nexgen Capital.
“(Federal Reserve Chairman Jerome) Powell made statements in the sense that the market should not get too excited about interest rate cuts in the first half, which ended up throwing cold water on investors,” he added.
On Tuesday, the environment was optimistic, with investors looking for higher risk assets, such as the real. In addition to adjustments in relation to more recent movements, quotes reflected, according to Izac, statements by the president of the Cleveland Fed, Loretta Mester.
According to her, if the US economy performs as expected, this could open the door to cuts in the basic interest rate. On the other hand, Mester said she is not yet ready to offer any schedule for a less restrictive monetary policy.
In this environment, the spot dollar moved away slightly from the 5.00 reais mark – a quote reached during Monday’s session, at the height of the pessimism brought by Powell’s statements.
“In recent days, we have seen stress that has taken over the markets in Brazil. I think 5.00 reais at this moment seem excessive; working around 4.85 and 4.90 reais makes more sense,” evaluated the chief economist at Way Investimentos, Alexandre Espirito Santo.
“Our market has overreacted in January and in the first days of February, but today (Tuesday) it sees that it is not all that. The stock exchange and the dollar are recovering a bit from the excess pessimism at the beginning of the year,” he added.
In the late afternoon, the dollar was also falling against major currencies and most commodity-exporting and emerging market currencies.
At 17:21 (Brasília time), the dollar index – which measures the performance of the US currency against a basket of six currencies – fell 0.26%, at 104.190.
The influence of the external factor ended up overshadowing the release, in Brazil, of the minutes of the last monetary policy meeting of the Central Bank.
In the document, the Monetary Policy Committee (Copom) assessed that the domestic scenario has evolved as expected, with significant disinflationary progress, but that international uncertainty calls for caution in monetary policy. The Central Bank emphasized that there is still a long way to go in returning inflation to the target.
The Copom also reiterated that the decoupling of inflation expectations is a concern that requires firm action from the monetary authority.
In the morning, the Central Bank sold all 16,000 traditional currency swap contracts offered to roll over the April maturities.