Dollar accelerates its rise and is now trading above R$5.50

The dollar rose more than 1.4% against the real on Friday, the 20th, on track to break a streak of seven consecutive sessions of losses, as domestic investors adjusted their positions in the face of a stronger US currency abroad.

At 1:30 pm, the dollar was up 1.44%, at R$5.5038 for sale. See quotes.

In this session, investors were adjusting their positions after a week marked by a weaker dollar amid the start of the Federal Reserve’s monetary easing cycle, with a 50 basis point cut in interest rates, and a 25 point increase in the Selic rate.

The prospect, and later confirmation, of an increase in the interest rate differential between the United States and Brazil this week caused the US currency to accumulate losses against the real, falling more than 2% by Thursday’s close and reaching its lowest price in a month.

But the momentum for the Brazilian currency appeared to be running out on Friday as investors adjusted their positions and reacted to greater dollar strength abroad.

“We saw two days in a row of very high risk appetite after the Fed decision… so today there is always a possibility of this technical correction,” said Leonel Mattos, Market Intelligence analyst at StoneX.

Abroad, the US currency recovered some of its losses after sessions marked by the Fed’s decision.

With no major economic data to generate pressure, the dollar received a slight boost from the Bank of Japan’s monetary policy decision, which decided to keep its short-term rate at 0.25% and signaled greater patience in raising interest rates again.

As a result, most of the US currency’s strength abroad came from its relationship with the yen. The dollar was up 1.1% against the Japanese currency, at 144.19.

The dollar index — which measures the performance of the US currency against a basket of six currencies — rose 0.24% to 100.910.

“The post-Fed euphoria is wearing off, especially for risk assets that had appreciated after Super Wednesday. In any case, we believe that a more constructive global scenario and the wider interest rate differential will be crucial in determining that the dollar’s ​​path of least resistance is downwards,” said Eduardo Moutinho, markets analyst at Ebury Bank.

In emerging markets, the dollar was still favored by weaker commodity prices this session, including iron ore and oil, which hurts raw material exporting countries such as Brazil.

Commodities have suffered as the economic outlook for China, the world’s largest importer of raw materials, continues to worsen and is facing a domestic demand crisis.

The dollar rose against the Mexican peso and the Colombian peso and remained stable against the South African rand.