The dollar gained strength in an attempt to recover the previous week's losses with expectations for inflation data in Brazil and the United States (Image: Getty Images/ Canva Pro)
O dollar spot (USDBRL) gained strength this Monday (23), with investors waiting for inflation data in Brazil and the United States.
In comparison with the real, the US currency ended trading at R$ 5,5353 (+0,26%).
The performance followed the trend seen abroad. The DXY indicator, which compares the dollar to a basket of six global currencies, closed up 0.15%.
What moved the dollar today?
The dollar rose on Monday (23) as investors waited for inflation data in Brazil and the United States.
The US currency has been recovering its losses. Last week, the currency was quoted at R$5.42, the lowest price in a month, with the monetary policy decisions.
Last Wednesday (18), the United States Central Bank, the Federal Reserve, began a cycle of monetary easing with a 50 basis point cut in interest rates, to 4.75% to 5.00% per year. Here, the Central Bank raised the Selic rate by 25 basis points, to 10.75% per year.
The increase in the interest rate differential between Brazil and the US, which is expected to increase even further in the coming months with the upcoming monetary policy decisions, makes the Brazilian currency more attractive to foreign investors, who use it in “carry trade“.
The real also lost strength with the focus on the domestic scenario.
Earlier, economists consulted by the Central Bank began to see the Selic at a higher level at the end of this year, at 11.50%, from 11.25% the previous week, according to the Focus Bulletin released this Monday (23). The expectation is that there will be an increase of 50 basis points at the next Copom meeting.
Inflation projections also increased for the tenth consecutive week.
Furthermore, the market focused its attention on the fiscal aspect.
The federal government announced an additional budget block of R$2.1 billion, but there was a reversal of the R$3.8 billion that had been set aside in July, according to the Bimonthly Revenue and Expenditure Report for the 4th two-month period, released late in the afternoon of last Friday (20).
Thus, there was a decrease of R$1.7 billion in expense containment, which went from R$15.0 billion to R$13.3 billion.
The market considered a new block of R$5 billion, taking expense containment to R$20 billion.
In a press conference, the executive secretary of the Ministry of Finance, Dario Duriganstated that there is discomfort within the government's economic team regarding an “irrationality” in the perception of economic agents about the management fiscalciting “poor speculation” amid criticism from analysts about creative ways to get around fiscal rule restrictions.
According to him, the government made adjustments to its projections in order to ensure that the 2024 accounts are closed “without any type of creativity or artifice” outside of the fiscal rules.
Throughout the week, investors monitor the Quarterly Inflation Report (RTI), the Broad Consumer Price Index – 15 (IPCA-15).
On the international agenda, the week will also be full of data, such as the Personal Consumption Expenditure Price Index (PCE) — the Fed's inflation benchmark — and the US GDP preview.
*With information from Reuters