06/24/2024 – 10:01
The dollar fell against the real in the first negotiations this Monday, 24th, in line with the weakness of the North American currency abroad, opening a week in which investors will be attentive to the release of inflation data from Brazil and the United States in order to project the future of domestic and global monetary policy.
At 9:48 am, the spot dollar fell 0.46%, to R$5.4162 on sale. On B3, the first-month dollar futures contract fell 0.32%, to R$5.4210 on sale. See quotes.
On Friday, the dollar in cash ended the day at R$5.4413 on sale, down 0.38%.
“Relief today reflecting outside. I think the market will be on hold and with modest volatility”, said Fernando Bergallo, operations director at FB Capital.
This week, after sessions marked by monetary policy decisions in Brazil and developed markets, investors turn their attention to the release of new inflation data, looking for signs about the price control process at a global level.
The domestic market will analyze new IPCA-15 data for June on Wednesday, with analysts consulted by Reuters expecting an increase of 0.45% on a monthly basis, compared to 0.44% in the previous month.
The release of inflation figures in Brazil has gained importance as market expectations about prices continue to rise for this year and next, generating concern among Central Bank authorities.
New market projections
Earlier, economists consulted by the BC in its Focus survey again raised their projection for the IPCA at the end of this year, to 3.98%, compared to 3.96% in the previous week, and for 2025, to 3.85%, from 3 .80%.
The autarchy’s view on unanchoring expectations will be elaborated once again on Tuesday, when the BC releases the minutes of the last meeting of the Monetary Policy Committee (Copom), in which it was decided to maintain the Selic rate at 10.50 % per year.
In this Monday’s Focus, economists also raised their projection for the value of the dollar at the end of this year, now seen at 5.15 reais, compared to 5.13 reais last week, amid the recent weakness of the Brazilian currency.
External scenario
Investors will be watching Friday’s release of May PCE index numbers, the Federal Reserve’s preferred inflation gauge. Analysts project stability, compared to an increase of 0.3% in April.
After a start to the year in which prices registered higher-than-expected increases in the US, the most recent figures have shown greater moderation, providing confidence to markets about the US disinflation process.
Despite the display of caution by Fed officials, a rate cut in September has been widely projected by traders, which could provide relief to the real.
The more the US central bank cuts interest rates, the worse for the dollar, which becomes comparatively less interesting when Treasury yields fall.
The weakness of the North American currency in Brazil could also be seen abroad.
The dollar index — which measures the US currency’s performance against a basket of six currencies — fell 0.31% to 105.550.
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