Dollar operates in decline, with Lula’s criticism of BC and Fed in focus

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On the previous day, the US currency rose 0.51%, sold at R$5.1991. Dollar banknotes Pexels The dollar operates in decline this Wednesday (8) with investors attentive to the next steps of the Federal Reserve (Fed, the North American central bank) and to President Lula’s statements in relation to the Central Bank’s performance in combating fees. At 9:02 am, the US currency fell 0.17%, quoted at R$ 5.1902.See more quotes. On the previous day, the US dollar rose 0.51%, quoted at R$5.1991. With the result, it accumulates a high of 2.48% in the month and 1% in the week. In the year, however, it still has a drop of 1.49%. 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? In the local news, recent speeches by President Luiz Inácio Lula da Silva about the Central Bank of Brazil weigh heavily. On Tuesday (7), Lula returned to criticize BC president Roberto Campos Neto. For him, the country will find it difficult to grow with the current basic interest rate, maintained at 13.75% by the Monetary Policy Committee (Copom). Lula has been criticizing the BC in recent days. Campos Neto was appointed to the post in the Jair Bolsonaro government. Also in the previous government, the BC’s autonomy was approved. Thus, Lula cannot change the command of the bank. Basic interest rate has been the target of Lula’s criticism In its last minutes, the Copom signaled caution with the inflationary path in Brazil, stated that there was a worsening of inflation expectations for longer terms and that it will remain “vigilant” to seek the targets fixed rates, being able to maintain high interest rates for a “longer” period or even raise them. Higher interest rates in Brazil increase the profitability of national fixed-income securities, which attracts foreign capital to the country and values ​​the real. ALSO READ Brazil has the highest real interest rates in the world; why doesn’t the rate drop? UNDERSTAND: How does a new interest rate hike by the Fed affect Brazil? BACKGROUND: The real’s performance was worse under the Dilma and Bolsonaro governments On the external scene, the statements by Federal Reserve Chair Jerome Powell that 2023 should be a year of “significant decline in inflation” were interpreted as less aggressive than feared , although he acknowledged that last week’s strong US jobs data showed the battle with inflation “will take a long time”. “Right now, investors seem to be focusing more on Powell recognizing that disinflationary forces are consolidating, rather than his concern over the latest jobs reading,” Susannah Streeter, market analyst at Hargreaves Lansdown, told Reuters. Last week, the Fed last week raised its interest rate target by 0.25 percentage point, a smaller increase than the previous ones. Higher interest rates in the United States increase the yield on government bonds in that country, considered the safest in the world. With more attractive returns, investors tend to migrate to American fixed income, which can negatively impact the currency and shares of emerging countries such as Brazil. Initial plugin text

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