Follow the dollar rate and the Stock Exchange today – 02/24/2023 – Market

The dollar rose against the real this Friday (24), with investors digesting the February reading of the IPCA-15 (Extended Consumer Price Index 15) and waiting for US inflation data that should offer new clues about the trajectory monetary tightening of the Fed (Federal Reserve, the American central bank).

At 10:03 am (Brasília time), the spot dollar advanced 0.56%, to R$ 5.1653 in the sale.

On B3, at 10:03 am (Brasília time), the first contract dollar futures contract rose 0.46%, to R$ 5.1690.

That rise was in line with the 0.35% rise in the dollar index against a basket of rich-country currencies this morning.

Abroad, the focus will be at 10:30 am (Brasília time) on data from the US inflation index PCE, which should offer new clues about the path of monetary tightening by the Fed.

“The PCE is essential for us to see how this inflation scenario will be out there, it will direct the expectation on whether the Fed will be stronger or weaker in raising interest rates,” Felipe Izac, a partner at Nexgen Capital, told Reuters.

“This week we had the release of the Fed’s minutes, and different from what we had been expecting in recent weeks, they printed a tougher speech, that inflation is far from being controlled and they are willing to put more pressure on the economy to control inflation,” he added.

According to Izac, the risk of an escalation in global geopolitical tensions is also on investors’ radar. This Friday marks the first anniversary of the Russian invasion of Ukraine.

Meanwhile, in Brazil, the IPCA-15 —a preview of the IPCA, a benchmark for the inflation targeting regime— rose 0.76% in February, accelerating after rising 0.55% in January. The result was above expectations in a Reuters poll, which rose by 0.72%.

According to Lara Rates, head of foreign exchange at One Investimentos, the higher-than-expected result contributed to the positive bias of the dollar against the real in this trading session. The reading of the IPCA-15 came amid financial market concerns about the possible weakening of inflation expectations following recent attacks by President Luiz Inácio Lula da Silva on the conduct of monetary policy by the Central Bank.

Izac, from Nexgen, added that Brazil is already in a “deteriorated” scenario, with the government “wanting to raise the inflation target and bring interest rates down by force”.

According to him, this tense general panorama weighs more on Brazilian asset prices than individual releases of inflation data, although he also pointed out the IPCA-15 as one of the points of attention of the day.

The day before, the spot US currency closed the day quoted at R$5.1363, down 0.67%.