The dollar was traded with little change against the real on the morning of this Wednesday (21), with investors avoiding making big bets before the announcement of the monetary policy decision of the central bank of the United States, the Fed (Federal Reserve).
On the domestic scene, the focus was also on the Central Bank’s decision, which will be announced after the markets close.
At 9:05 am (GMT), the spot dollar advanced 0.06%, at R$5.1567 on sale.
On B3, at 9:05 am (GMT), the first-maturity dollar futures contract rose 0.22% to R$5.1695.
Brazil and the United States announced adjustments to their respective interest rates this afternoon.
In the world’s main economy, the Fed is expected to raise the cost of credit by at least 0.75 percentage points, according to analysts.
In Brazil, the expectation prevails that the local Central Bank will end the cycle of raising the Selic rate, without any readjustment, maintaining the level of 13.75% per year. A minority group of economists believes there will be a last adjustment of 0.25%.
This Tuesday (20), in contrast to the global pessimism registered by the main stock markets on the planet, the Brazilian Stock Exchange delivered gains for the second day in a row. The Ibovespa benchmark index rose 0.62% to 112,516 points. At the close of the domestic exchange market, the spot commercial dollar dropped 0.21%, quoted at R$5.1530.
Analysts say that Brazil is currently seen as an interesting destination for investors because the country is showing signs of success in terms of its monetary policy. Meanwhile, the major economic powers are also trying to tame inflation by accelerating interest rates, but they still don’t seem to know clearly how much they will need to tighten credit until consumer prices start to fall.
There is consensus in the market on the need to make credit more expensive to withdraw money from circulation. It is the main measure adopted in an attempt to curb world inflation, a process that began due to failures caused by the pandemic in the global supply of raw materials and consumer goods, a problem that became even more serious with the Ukrainian War raising the price of energy and food.
There are fears, however, that the cost of this monetary tightening will be a serious slowdown in economic activity on a global scale.
Among the effects of a recession are the absence of business growth, a consistent increase in unemployment and an exaggerated fall in consumption.
With no prospect of company growth, investors tend to abandon the stock markets to seek gains in fixed income. The safest of these is the American one, where US sovereign bonds are getting more and more advantageous.
The yield on US Treasury bonds maturing in ten years, a benchmark for this market, reached the highest level in a decade on Tuesday, The Wall Street Journal reported. It is the effect of the Fed’s expectation of interest rate hikes.
The movement of dollars towards US fixed income also makes the currency scarce in other countries. The dollar became more expensive this year in the average comparison with the main currencies.
Unlike what happens with most currencies, the real gained value against the dollar this year. The most common explanation for this is the so-called real interest rate, which is the difference between the expectation of future inflation and the Selic rate. This relationship makes Brazilian fixed income interesting as inflation recedes and the basic interest rate remains high.
Other reasons also make Brazil attractive to investors at the moment. One of them is the existence of solid companies with cheap shares on the Stock Exchange. Specialists also mention that there are companies in the Brazilian market with great potential to benefit from oil and food inflation, as they export these goods.