04/10/2024 – 12:49
By Fernando Cardoso
SÃO PAULO (Reuters) – The dollar fell against the real this Friday, giving back gains from the beginning of the session, as the immediate reaction to strong employment data in the United States, which momentarily dropped the Brazilian currency, gave way to a search for higher risk assets.
At 12:17 pm, the spot dollar fell 0.25%, to 5.4601 reais on sale. On B3, the first-month dollar futures contract fell 0.36%, to 5.474 reais on sale.
This session, much of the focus in global markets was on the release of the US September jobs report, which showed that employers added 254,000 jobs last month, from an upwardly revised 159,000 in August.
The unemployment rate, for its part, fell to 4.1% in September, compared to 4.2% in the previous month.
The result dispelled the concerns of financial agents about a deterioration in the North American job market, showing that the US economy remains robust and possibly in the process of accelerating.
“The number shows that the job market remains hot and vigorous. It eliminates fears of a recession and fears that the job market could slow down very quickly and abruptly”, said Leonel Mattos, Market Intelligence analyst at StoneX.
“In other words, inflation has moderated, stabilized little by little, while economic activity remains in good condition”, he added.
With this perspective, which generated optimism in relation to the rest of the world economy, investors increased their appetite for risk, generating gains in stock and foreign exchange markets around the globe.
Riskier assets had been suffering heavy losses throughout the week amid growing concerns about escalating geopolitical tensions in the Middle East.
In addition to the real, other emerging currencies also gained against the dollar in this session, such as the Mexican peso, the Colombian peso and the South African rand.
In addition to signaling the strength of the US economy, the employment data indicated that aggressive monetary easing by the Federal Reserve will not be necessary, which reduced interest rates by 50 basis points in September in order to show the institution’s commitment to sustaining the rate. of unemployment.
Traders put a 94% chance of a 25-point Fed rate cut at the next meeting in November, up from 67% before the data, which is a positive for the dollar, which had accumulated losses on the prospect of further easing. aggressive at the US central bank.
Thus, the dollar remained strong against its strong peers. The dollar index — which measures the US currency’s performance against a basket of six currencies — rose 0.68% to 102.600.
At the peak of the session in Brazil, in the first hour of negotiations, the dollar rose 0.81% against the real.
In addition to the movement following the strength of the US currency abroad, the initial perception in the domestic scenario was that a likely smaller increase in the interest differential between Brazil and the US in the coming months, as the Central Bank carries out a new tightening monetary policy, favored the dollar.
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