He Real Brazilian records losses on Thursday after four consecutive days of profits. The Brazilian currency on Wednesday reached its highest price since October 18.
The USD/BRL has opened today’s day testing a daily minimum in 5,6468 but has subsequently gained impulse, raising a maximum of the day in 5,6755.
He USD/BRL quote when writing about 5,6662, winning 0.31% in Thursday we have.
The Central Bank of Brazil rises its interest rates to 14.25%
- He Central Bank of Brazil announced late Wednesday that it rose its interest rates at 100 basic points up to 14.25%its highest level since 2016. The entity pointed out that at the next meeting the types would rise again but that the increase would be of less magnitude, which stopped the climbing of the Brazilian real after reaching maximum of five months just before the publication.
- He US dollar has strengthened in recent hours, favored by US datawhich were better than expected. Weekly unemployment requests rose to 223,000 last week since the previous 221,000, improving the expected 224,000. The manufacturing index of the Philadelphia Fed was moderated to 12.5 points in March from February 18.1, standing above the estimated 8.5. Finally, existing housing sales grew 4.2% in February after falling 4.7% in January.
US dollar FAQS
The US dollar (USD) is the official currency of the United States of America, and the “de facto” currency of a significant number of other countries where it is in circulation along with local tickets. According to data from 2022, it is the most negotiated currency in the world, with more than 88% of all global currency change operations, which is equivalent to an average of 6.6 billion dollars in daily transactions. After World War II, the USD took over the pound sterling as a world reserve currency.
The most important individual factor that influences the value of the US dollar is monetary policy, which is determined by the Federal Reserve (FED). The Fed has two mandates: to achieve price stability (control inflation) and promote full employment. Its main tool to achieve these two objectives is to adjust interest rates. When prices rise too quickly and inflation exceeds the 2% objective set by the Fed, it rises the types, which favors the price of the dollar. When inflation falls below 2% or the unemployment rate is too high, the Fed can lower interest rates, which weighs on the dollar.
In extreme situations, the Federal Reserve can also print more dollars and promulgate quantitative flexibility (QE). The QE is the process by which the Fed substantially increases the flow of credit in a stuck financial system. It is an unconventional policy measure that is used when the credit has been exhausted because banks do not lend each other (for fear of the default of the counterparts). It is the last resort when it is unlikely that a simple decrease in interest rates will achieve the necessary result. It was the weapon chosen by the Fed to combat the contraction of the credit that occurred during the great financial crisis of 2008. It is that the Fed prints more dollars and uses them to buy bonds of the US government, mainly of financial institutions. Which usually leads to a weakening of the US dollar.
The quantitative hardening (QT) is the reverse process for which the Federal Reserve stops buying bonds from financial institutions and does not reinvote the capital of the wallet values ​​that overcome in new purchases. It is usually positive for the US dollar.
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
