Dollar operates below R$5 after Fed decision and awaiting Copom; Ibovespa rises

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The day before, the North American currency advanced 0.07%, quoted at R$5.0292, renewing its highest level since October. The main B3 stock index ended with a gain of 0.45%, at 127,529 points. Dollar operates on the rise Karolina Grabowska The dollar operates on the decline this Wednesday (20), the day on which the central banks of Brazil and the United States announce their monetary policy decisions. The expectation for Superquarter is that, in Brazil, the Monetary Policy Committee (Copom) will reduce the Selic, the basic interest rate, by 0.5 percentage points, which would take it to the level of 10.75% per year. In the United States, the Federal Reserve (Fed, the American central bank) kept its rates unchanged between 5.25% and 5.50% per year, still at the highest level since 2001. Ibovespa, the main stock index on the stock exchange, values, operates on the rise. See below for a summary of the markets. Dollar At 3:25 pm, the dollar fell 0.71%, quoted at R$4.9936. See more quotes. The previous day, the North American currency rose 0.07%, selling at R$5.0292. With the result, it accumulated: increase of 0.64% in the week; gain of 1.14% in the month; increase of 3.64% in the year. Ibovespa At the same time, Ibovespa rose 0.62%, to 128,314 points. The day before, the index rose 0.45%, to 127,529 points. With the result, it accumulated: increase of 0.62% in the week; decline of 1.16% in the month; and a drop of 4.96% in the year. Understand what makes the dollar rise or fall CASH OR CARD? What is the best way to take dollars when traveling? DOLLAR: When is the best time to buy the currency? What’s moving the markets? Investors arrive at this Super Wednesday, with no expectation of surprise in relation to the monetary policy decisions of Brazil and the USA, but with an eye on what central banks should say in their statements. This is because it is in this document that the market can glimpse what the next steps for basic rates should be in the coming months. In the United States, for example, there is still a lot of expectation about when the Fed should start the cycle of base rate cuts. This Wednesday, after once again keeping rates unchanged, the North American BC once again stated that it does not consider it appropriate to reduce the interest rate range until it has “greater confidence that inflation is evolving in a sustainable manner towards 2%”, the Fed target. Despite having reduced last year, North American prices remain at high levels. Furthermore, recent indicators also indicate that the country’s economic activity has been expanding at a “solid pace.” The institution’s projections, however, continue to indicate that three cuts of 0.25 percentage points (pp) should still happen throughout this year. In this scenario, most investors and experts continue to expect the start of the cutting cycle to take place in the first half of 2024. More pessimistic segments, however, expect changes only in the second half of the year. With higher rates, United States government bonds deliver a higher return to investors. These bonds — American Treasuries — are considered the safest investments in the world. Here, the focus is on the decision of the Monetary Policy Committee (Copom) of the Central Bank of Brazil (BC), which should come out after the markets close. The institution has been reducing the Selic rate in continuous cuts since August, by 0.50 percentage points. Brazilian inflation had been showing signs of slowing down, but services are once again a concern and will be the focus of the new statement. “It is essential that the decisions of the Central Bank of Brazil are aligned with the internal and external macroeconomic context,” said Costa, from B&T.

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