After reaching R$6,095 on Tuesday (17), a new nominal historical record, the currency opened on Wednesday (18) on a surge and hit 6,167 at the day’s high; Fed decision on US interest rates is on the radar
The dollar started the day on the rise this Wednesday (18), after the approval of economic projects by the Legislature and actions to control the appreciation of the currency. The Chamber of Deputies approved the basic text of the spending containment package and the regulation of tax reform, which now awaits the president’s sanction. Furthermore, the Mixed Budget Committee (CMO) approved the final report of the Budget Guidelines Law (LDO), while the Senate approved the renegotiation of state debts.
At 9:04 am, the American currency showed an increase of 0.26%, being quoted at R$6.1142. Around 11 am, it reached R$6,162. At the day’s high, it reached R$6.167. In the previous session, the dollar had reached a new nominal historical record, ending the day at R$6.095. Investors are paying attention to movements in the public bond market and the definition of interest rates in the United States, which will be announced by the Federal Reserve (Fed).
The Central Bank of Brazil intervened in the market with extraordinary exchange auctions, which helped contain the rise of the dollar, which reached R$6.20. The Ibovespa index, in turn, registered an increase of 0.92%, reaching 124,698 points. Despite the new nominal record, the highest real exchange rate for the dollar occurred in September 2002, when it was equivalent to R$8.75 in current values.
The minutes of the Monetary Policy Committee (Copom) revealed that the deterioration in inflation led to a more rigorous stance, resulting in an increase in the Selic rate from 11.25% to 12.25% per year. The committee signaled the possibility of new increases in upcoming meetings. In response to this scenario, the dollar opened higher, and the Central Bank sold US$1.272 billion in an auction.
Experts point out that the appreciation of the dollar is driven by fiscal uncertainties and a lack of confidence in the government’s economic management. The expectation surrounding the vote on the spending cuts package also plays a significant role in the currency’s rise. Furthermore, the scarcity of dollars in the country, common at this time of year, led financial institutions to report difficulties to the Central Bank, which has been selling dollars in cash.
*Report produced with the help of AI
