Dollar soars with booming employment in the US

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If the possibility of a cut in the American basic interest rate in March was “unlikely”, as defined by Jerome Powell, president of the FED (Federal Reserve) in a press conference on Wednesday, 31st, this Friday’s Payroll employment report, practically ended the hopes of the most optimistic.

Since the beginning of January, investors have been looking for reasons to cut interest rates as soon as possible. On the 12th, bets reached their peak, and the pricing of future interest rates there indicated a chance of practically 80% of a reduction in March.

On Wednesday, the FOMC, a kind of American Copom (Monetary Policy Committee), released a statement indicating that the chances of a cut in the coming months were low – a message that was confirmed shortly afterwards by Powell in a press conference. This Friday, the opening of more than 350 thousand vacancies, against 185 thousand expected positions, showed that the FED’s work to cool down the American economy should take longer.

The chances of a cut in March dropped to just 20%. As a result, the American currency had a day of gains against the main world currencies. In comparison with the real, the dollar operated practically the entire session above 1% appreciation, quoted at 4.97 reais.

Here, future interest rates responded to the reality shock with Payroll and also rose. Shorter maturities advanced around 4 basis points, while longer maturities rose 12 basis points.

Ibovespa, the main stock index, closed down 1.01%, at 127.1 thousand points, on a day of low commodity prices. The main negative contributions to the index came from Vale (-2.03%) and Petrobras (PN -1.30% and ON -1.47%);

On the positive side, the shares of Gerdau (+2.38%), Itaú (+0.15%) and Suzano (+0.47%) were the most relevant. On Monday, the 5th, Itaú releases the balance sheets with the results for the 4th quarter of last year.


The article is in Portuguese

Tags: Dollar soars booming employment

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