Dollar opens lower, with market echoing Copom minutes

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On Monday, the US currency closed up 0.49%, sold at R$5.1726. During the day, however, the quotation reached R$ 5.20. Dollar banknotes Pexels The dollar opened lower this Tuesday (07), with investors reflecting the minutes of the last meeting of the Monetary Policy Committee (Copom), released this morning. On the other hand, the speeches of President Luiz Inácio Lula da Silva about the Central Bank of Brazil on the eve and the expectations about the next steps of the Federal Reserve (Fed, the American central bank) weigh on the market. fell 0.47%, quoted at R$ 5.1481. See more quotes. The day before, the dollar rose by 0.49% and closed short at R$5.1726, but reached R$5.21 during the trading session. With the result, it accumulates a high of 1.96% in the month. In the year, however, it still has a loss of 2%. READ ALSO: UNDERSTAND: What makes the dollar rise or fall in relation to the real COMMERCIAL X TOURISM: what is the difference between the quotation of foreign currencies and why is tourism more expensive? DOLLAR: When is the best time to buy the currency? MONEY OR CARD? What’s the best way to take dollars on trips? What is messing with the markets? This morning, the Copom released the minutes of its last meeting, signaling caution with the inflationary path in Brazil. The Committee stated that there has been a deterioration in longer-term inflation expectations and added that it will remain “vigilant” to seek the targets set, and may keep interest rates high for a “longer” period than previously anticipated, or even raise them. Higher interest rates in Brazil increase the profitability of domestic fixed-income securities, which attracts foreign capital to the country and values ​​the real at the expense of the dollar and currencies of other currencies. Yesterday, President Lula took a stand against the latest decisions of the Central Bank and said “this increase in interest rates and the explanation they gave to Brazilian society is a shame”. During the inauguration event of Aloizio Mercadante as the new president of the National Bank for Economic and Social Development (BNDES), Lula said that Brazil has a “culture” of high interest rates that “does not match the country’s need for growth” and criticized the Copom’s decision to maintain the Selic, basic interest rate, at 13.75% per annum in the last week. Last week, the Federal Reserve (US BC) raised its interest rate target by 0.25 percentage points, a smaller increase than the previous ones. But the latest employment report in the United States, with strong and above-expected results, renewed concerns about the level of interest rates needed to bring the country’s inflation back to the target. US Labor Department data released on Friday showed that US job creation accelerated in January, with 517,000 non-agricultural jobs added and the jobless rate falling to 3.4%, the lowest in 53 and a half years old. US Treasury Secretary Janet Yellen said on Monday that she sees a way to avoid a recession in the country, with inflation falling significantly and the economy remaining strong, given the strength of the job market. “You don’t have a recession when you have 500,000 jobs and the lowest unemployment rate in over 50 years,” Yellen told ABC’s Good Morning America. “What I see is a path where inflation is coming down significantly and the economy remains strong.” Yellen said inflation remains very high but has been falling for the past six months and could slow further due to measures taken by President Joe Biden’s administration, including moves to reduce the cost of gasoline and prescription drugs. Furthermore, geopolitical tensions between China and the US soared after an alleged spy balloon hit investor sentiment. A US military fighter shot down a suspected Chinese spy balloon on Saturday, a week after it entered US airspace for the first time, setting off a dramatic spy saga that has overshadowed already strained Sino-US relations. China has strongly condemned the military attack on the balloon, which it says was used for meteorological and other scientific purposes. “Without a doubt, the incident is a negative headline for the market,” Yuan Yuwei, hedge fund manager at Water Wisdom Asset Management, told Reuters. “The strong US jobs report also cooled the fever of ‘rate shifts’ perceptions, leading to a higher dollar and a lower yuan.” READ ALSO UNDERSTAND: How does a new interest rate hike by the Fed affect Brazil? BACKGROUND: The performance of the real was worse in the Dilma and Bolsonaro governments Initial plugin text

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