by José de Castro
SAO PAULO (Reuters) – The dollar closed close to stability on Thursday, contained by two interventions by the Central Bank with the sale of currency after the quotation jumped above 5.70 reais and the Brazilian currency led losses in the world.
Operators reported outflows of resources, which in a period of lesser liquidity end up making more prices in the trades.
The spot dollar was at 5.7202 reais at the maximum of the trading session, up 0.91%, at 11:55 am (Eastern) and approached that level around 1:13 pm, when the BC announced the first sale of the dollar in cash of the day. The second operation took place around 2 pm. In the two auctions, Bacen placed a total of 965 million dollars.
The monetary authority, therefore, resumed extraordinary operations on the spot market, after carrying out them for the last time on Tuesday. The Central Bank has resorted to this instrument in December, a typical period of reduced liquidity due to the lower flow of trades and also the remittances of profits and dividends.
The market also analyzed throughout the day data on the preview of consumer inflation in Brazil (measured by the IPCA-15), which in December decelerated the increase, but still with a composition that indicated continuous pressure on prices, complicating the BC’s task in the monetary policy. In the year, the IPCA-15 soared 10.42%.
At the same time, the United States reported firmer inflation data, which endorsed bets on higher interest rates there – a condition that, in theory, harms emerging markets due to the risk of outflow of resources from countries like Brazil to the US.
At the close of this Thursday, the dollar in cash showed a negative change of 0.09%, at 5.6634 reais. For the week, the currency fell 0.37%, reducing gains in December to 0.47%. In 2021, the price jumps 9.09%.
Volatility was marked this Thursday. In the day’s low, the dollar fell 0.74% to 5.6267 reais, a difference of about 10 cents of the real compared to the peak of the session. The implied volatility of three-month dollar/real options – a measure of perceived instability for the exchange rate – is on a downward curve, but remains above that of emerging pairs.
And the instability that marked 2021 according to recent indicatives should continue in 2022. In addition to the turnaround in global monetary policy, the market will also have to deal with pre-election moods in Brazil.
“Since Lula’s emergence as a potential presidential candidate, polarization has increased. Catalysts for a rally (of domestic markets) would be associated with the emergence of a third way or with Lula turning to more market-friendly rhetoric as well as a clear solution to spending pressures,” Bank of America said in a statement. .
BofA calculates that the dollar will reach 5.80 reais at the end of September, the month before the elections, before closing the year at 5.70 reais.
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