By Luana Maria Benedito and José de Castro
SAO PAULO (Reuters) – The dollar was down 1% against the real in the early afternoon of this Friday, even trading below 5.20 reais, in reaction to the absence of signaling by the chairman of the US central bank , Jerome Powell, on the timing of cutoffs.
In remarks prepared for a speech at the Jackson Hole central bankers conference, Powell signaled that the Fed will remain cautious in any eventual decision to raise interest rates as it tries to bring the economy back to full employment, repeating that it wants to avoid controlling inflation. transitional” and potentially discouraging job growth in the process — advocating the Fed’s new monetary policy approach that Powell introduced a year ago. [nL1N2PY1HM]
At 13:40, the dollar retreated 1.10%, to 5.1992 reais on sale, after reaching 5.19145 reais in the day’s low, reached close to 12:50.
Shortly before Powell’s speech, held at 11 am, the dollar in cash was down 0.47% to 5.2321 reais. Soon after the release of the first excerpts of the speech, the currency even reduced losses to 0.25%, at 5.2436 reais. Quickly, however, there were strong sales orders that brought down the price.
Abroad, the dollar index – which before Powell had hit the session high by rising 0.15% – fell 0.39% this afternoon, to 92.694.
“The Fed emphasized once again that the beginning of the ‘tapering’ does not mean that we are closer to interest rate increases, and this makes the market, in my opinion, to have an even calmer view regarding the beginning of the reduction of interest rates. stimuli, which may have a less volatile reaction”, commented Mauro Morelli, chief strategist at Davos Investimentos.
According to him, the rise of global stock exchanges and the international devaluation of the dollar evidence a slightly more “dovish” reading of Powell’s speech.
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