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Dollar opens higher cautiously ahead of Fed minutes release

THE dollar rose 0.87%, quoted at R$4.854, around 9:29 am this Wednesday (25), with cautious investors waiting for the minutes of the monetary policy meeting of the Federal Reserve the central bank of the United States, in May.

The expectation is that the text will bring more information about the next steps of the country’s high interest rate cycle and the reduction of the balance of purchases of securities by the municipality, two elements that tend to slow down the economy in the midst of the fight against a record inflation .

In this session, the Central Bank will auction up to 15 thousand traditional foreign exchange swap contracts for the purpose of rolling over the maturity date of July 1, 2022.

On Tuesday (24), the dollar rose 0.11% to R$4.813. already the Ibovespa fell 0.21%, to 110,580.79 points.

global pessimism

The most recent instigator of global risk aversion was the interest rate hike in the US , announced by the Federal Reserve on May 4. Despite discarding hikes of 0.75 pp or a risk of recession, the municipality signaled at least two more hikes of 0.5 pp

Higher interest rates in the United States attract investments for the country’s fixed income due to its high security, but it harms stock exchanges around the world, including the North American ones.

Along with a series of interest rate hikes around the world, lockdowns in china to try to contain Covid-19, projections of a strong economic slowdown and even the risk of a global recession have increased, hurting markets and increasing investor risk aversion.

However, with the prospect that these restrictions may be lifted in June, Chinese demand is expected to return to previous levels, which has returned to favor commodity exporters and relieves some of the pressure on the real.

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*With information from Reuters

Source: CNN Brasil

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