© Reuters. .
By José de Castro
SAO PAULO (Reuters) – The dollar rose again and renewed its historic closing high against the real on Wednesday, on a dollar day at peaks in several years abroad after stronger data on the United States economy.
The dollar broke a record for the second consecutive session in a month that counts with the ten highest quotations ever recorded in the local market.
In addition to factors abroad – where the dollar has operated at its highest since May 2017 -, domestic operations continued to be influenced by the perception that the Central Bank seems less willing to operate in the exchange rate even with the dollar at consecutive record highs and already aiming 4.40 reais.
The day before, BC President Roberto Campos Neto said that BC is calm about the exchange rate. In the understanding of the market, Campos Neto’s speech indicates that the BC sees no urgency in making recurrent interventions to defend the currency level.
“In general, the BC’s message may well make interventions less sympathetic to the real than in previous episodes,” Citi said in a statement.
The BC sold, in the sum of Thursday and Friday of last week, US $ 2 billion in traditional foreign exchange swap contracts. But since then, the price has already risen 1.50%, more than erasing the drop of 1.14% accumulated in the days when the BC intervened.
The statement by the head of the monetary authority came at a time when the perception in the market is growing that the government is supporting a more devalued exchange rate to boost growth.
This Wednesday, the BNP Paribas (PA 🙂 cut the projection for Brazil’s GDP growth this year from 2% to 1.5%, citing the impacts of the coronavirus on the Chinese economy – the main destination of Brazilian exports.
A slower growth scenario reduces the scope for increases in fixed income returns and decreases the foreign investor’s appetite for Brazil – both factors undermining expectations of capital inflows that could help bring some relief to the exchange rate.
The spot dollar closed at a high of 0.18%, to 4.3657 reais in the sale, above the hitherto record of 4.388 reais from the close of the previous day.
In B3, the future dollar had gained 0.11%, to 4.3625 reais.
The US currency also strengthened abroad, after data pointed to a still firm US economy and after the Federal Reserve (Fed, BC) showed optimism about the country’s economic expansion – the longest in history.
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