Dollar falls with strong commodities and extra swap auction, but slows pace for Treasuries

The dollar is operating lower this Tuesday morning, the 2nd, but is already reducing its pace in the face of the upward trend in future interest rates in the wake of the appreciation of Treasury yields.

The American currency is under pressure on a morning of commodity appreciation and with the forecast of an extraordinary auction by the Central Bank of up to US$ 1 billion in exchange rate swaps (12:30 p.m.), which corresponds to the sale of dollars on the futures market. It is the first time since December 2022 that the BC has intervened in the exchange rate and the operation is justified due to the “demand for exchange rate instruments resulting from the effects of the redemption of NTN-A3 (National Treasury Note, subseries A3) on 4/15/ 2024”, according to the municipality. In addition, the BC carries out the usual swap rollover (11:30 am).

On Monday, the US currency in cash closed at R$5.0591 (+0.87%), the highest price since October 13, after ending the first quarter with gains of 3.34%. With the extra exchange rate swap, the BC would prevent the liquidity generated in the banking system by this redemption of the security linked to exchange rate variation from generating additional demand for the dollar. According to analysts and operators, the BC’s operation also aims to reduce exchange rate volatility.

Investors also evaluate the Focus bulletin. The expectation for inflation this year was 3.75%. For 2025, the main focus of monetary policy, the projection also remained stable, at 3.51%. As for the Selic rate projections, the market maintained the median for the Selic at 9% at the end of this year and at 8.50% for 2025. For the Gross Domestic Product (GDP), the expectation for this year’s growth was raised by 1.80% to 1.85%.

Abroad, even after the vigorous rise registered on Monday, Treasury interest rates are rising again, due to doubts about the American monetary easing cycle and waiting for data from the United States and speeches from several Federal Reserve directors this Tuesday.

However, the rise of around 1.5% in oil and 3.09% in iron ore in Dalian, China, and relief in the dollar abroad favor the appreciation of the real.

At 9:31 am this Tuesday, the spot dollar lost 0.36%, at R$5.0411. The dollar for May gave up 0.26%, to R$5.0550.