Dollar breaks R$5 after Powell states that the Fed’s monetary tightening is nearing an end

The dollar followed the euphoria of other markets and lost space against its peers following statements by Fed President Jerome Powell following the monetary policy decision.

The market interpreted Powell’s statements as an indication that the American Central Bank is not likely to raise interest rates again in December, although it will likely keep them high for a long time.

Powell said inflation expectations are clearly “in a good place” and said the Fed has gone “quite far in tightening” and is “near the end of it.”

Asked about the indications in the dot chart released at the previous meeting, in September, which showed that the majority of Fed members supported another interest rate hike this year, Powell clarified that the projection “is not a promise”.

In the domestic scenario, investors continued to monitor fiscal risk. According to sources heard by Valor and Broadcast, the government would have consulted the LDO rapporteur, Danilo Forte, about what the deadline would be to send an amendment to the text for the 2024 fiscal target.

The spot dollar (FX:USDBRL) closed down 1.36%, at R$4.9730, after fluctuating between R$4.9690 and R$5.0454. At 5:04 pm, the future dollar for December fell 1.29%, to R$4.9900. Abroad, the DXY index operated stable (+0.01%), at 106.675 points. The euro fell slightly by 0.03%, to US$1.0572. And the pound also remained stable (-0.01%), at US$ 1.2150.