By Luana Maria Benedito
SAO PAULO (Reuters) – The dollar abandoned earlier losses and started to rise on Thursday, trading above 5.12 reais, with signs of inflationary relief in the United States being offset by recent comments from Federal Reserve officials, which renewed their commitment to fighting inflation.
At 11:43 (GMT), the spot dollar advanced 0.76%, at 5.1241 reais on sale, around the peaks of the day, after earlier having retreated to 0.47%, at 5.0616 reais .
This morning’s high was also attributed by some market participants to an adjustment movement, after the US currency traded on the interbank market closed the last session down 0.87%, at 5.0853 reais, its lowest level. in eight weeks.
“The main culprit behind yesterday’s sharp improvement in mood was a lower-than-expected CPI (US Consumer Inflation Index), which fueled expectations that peak inflation was behind us,” said strategists at Guide Investimentos. in report.
“Nevertheless, several Fed leaders (Federal Reserve, US central bank) reiterated that the battle against inflation is far from won, and that there is a great chance that the Fomc (the Fed’s monetary policy decision committee) will follow through. raising interest rates into 2023,” Guide said, noting that this reduced the momentum of the risky asset rally seen on Wednesday.
The day before, Minneapolis Federal Reserve Chairman Neel Kashkari said the U.S. central bank is “far, far away from declaring victory” over inflation, while Chicago Fed chief Charles Evans said he believed the US base rate will need to reach 4% by the end of next year. The higher borrowing costs in the world’s largest economy, the more the dollar tends to benefit.
On B3, at 11:40 (Brasília time), the dollar futures contract of the first month rose 0.44%, at 5.1475 reais.
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