04/10/2024 – 18:00
The United States payroll employment report, higher than expected, triggered an appreciation of the dollar against strong rivals. However, the real managed to appreciate against the North American currency this Friday, the 4th, with the entry of commercial flow through carry trade operations – due to the positive expectation for the differential between internal and external interest rates – and also supported by the new rise of oil. Even so, during the week, the currency accumulated an appreciation of 0.36%.
The spot dollar closed down 0.33%, at R$5.4556 this Friday, with the real having the third best performance among emerging currencies (behind only the Colombian peso and the Mexican peso). The DXY index, which measures the dollar against a basket of six strong currencies, registered an increase of 0.52% today, at 102,520 points, and a gain of more than 2% for the week.
The long-awaited United States payroll report pointed to the creation of 254,000 jobs in the US in September, above the Broadcast Projections median of 140,000.
The chances of a cut of just 0.25 percentage points by the Federal Reserve (Fed, the North American central bank) in November gained strength (CME Group platform points out that this probability is 98.9%), but investors continued to focus in the positive perspective of an interest rate differential with the possibility of a more significant increase in the Selic rate.
“Support for the real is mainly the result of the expectation of an increase in the Selic rate, despite the decrease in expectations about the magnitude of the cut by the Fed”, says Elson Gusmão, foreign exchange director at brokerage Ourominas.
The interest differential favors the real, because “investors end up taking money from a place with a lower interest rate and bringing it to a higher risk market, like Brazil, which has a higher premium” in the so-called carry trade, according to the foreign exchange specialist at Manchester Investimentos, Thiago Avallone.
Both state that the market had a high global risk aversion throughout the week, mainly related to the conflict in the Middle East. However, the lack of major developments today opened up a gap for a certain risk appetite.
“The market is awaiting retaliation from Israel against Iran, and so far it has not happened yet. So it ended up helping with global risk appetite, and this made currencies from emerging countries end up standing out a little”, says Gusmão, from Ourominas.
Avallone, from Manchester, also mentions that the appreciation of oil provides additional support to the real, given that Brazil is one of the main exporters of the commodity. During the week, the WTI barrel advanced 9.0% and Brent, 8.4%.
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