After peaking at R$6.0487, the US currency lost some of its momentum in the final stretch of business and closed up 0.86% this Thursday (12)
Domestic fiscal uncertainties and the advance of foreign exchange prevented the real from benefiting this Thursday (12), from the interest rate shock promoted this Wednesday (11), by the Monetary Policy Committee () of. After a dip in the first hours of trading, when it broke the floor of R$ 5.90 and registered a minimum at R$ 5.8681, the cash price gained strength in the remainder of the session and closed again above the level of R$ 6, 00.
The collapse of the real occurred amid news about the fiscal package negotiations in Congress, which accentuated the risk of dehydration and reduction in the power of the cost containment measures proposed by the Ministry of Finance. This movement occurred in conjunction with the worsening of other domestic assets, especially the increase in long future interest rates, more linked to the perception of fiscal risk.
Operators also cited technical factors that may have boosted the dollar, such as adjustments and profit-taking, after the currency’s fall yesterday afternoon and this morning, and stronger one-off demand from importers. Yesterday, the dollar plunged in the final stretch of the session and closed down 1.53%, in a movement that coincided with the information that President Luiz Inácio Lula da Silva would undergo a new intracranial procedure.
After peaking at R$6.0487, the spot dollar lost some of its momentum in the final stretch of business and closed up 0.86%, quoted at R$6.0072. The main thermometer of business appetite, the dollar futures contract for January showed significant turnover, above US$ 19 billion – which suggests relevant changes in investor positioning.
Abroad, the DXY index – a thermometer of the behavior of the American currency in relation to a basket of six strong currencies – showed a slight increase, approaching 107,000 points at its maximum (106,962 points). Treasury rates rose after a higher-than-expected result in wholesale inflation in the US. The American currency rose as a group in comparison with emerging currencies and commodity exporting countries, with the real as a major negative highlight.
The executive secretary of the Ministry of Finance, Dario Durigan, met this afternoon with the rapporteurs of the fiscal plan in Congress. Possible changes to proposals related to the BPC and the project that limits the use of credits to offset tax debts may occur.
Yesterday, Copom raised the rate by 1 percentage point, to 12.25%, in a statement considered harsh. The decision was already expected by relevant parts of the market. The surprise was due to the statement that the committee “anticipates, if the expected scenario is confirmed, adjustments of the same magnitude in the next two meetings”.
In theory, higher interest rates increase the attractiveness of carry trade operations, which exploit differences in interest rates between countries. Furthermore, they make it more costly to carry positions in dollars, which should lead to the dismantling of part of the exchange rate hedge and even bets against the Brazilian currency.
In the morning, the BC sold a full offer of US$4 billion divided into two line auctions with a repurchase commitment. Operators claim that the operation sought to meet demand for spot currency typical at the end of the year, when trade financing lines are scarce and profits and dividends are remitted abroad.
*With information from Estadão Conteúdo
Posted by Carolina Ferreira
