On Friday, the U.S. dollar experienced its fourth consecutive day of decline against the Brazilian real.
This trend was influenced by the latest U.S. inflation data, which aligned with expectations and boosted currencies in emerging and commodity-exporting nations like Brazil.
Closing at 4.9110 Brazilian reais, the spot dollar saw a 0.24% decrease for the day.
Throughout the week, it accumulated a 0.33% drop. Despite these declines, the dollar has risen 1.22% since the start of January.
In the Brazilian B3 exchange, the nearest dollar futures contract fell by 0.13%, closing at 4.9140 reais.
The dollar’s performance fluctuated slightly during the trading session, ranging from a low of 4.9023 reais to a high of 4.9210 reais.
Global factors, particularly U.S. inflation data, heavily influenced the currency market.
The U.S.’s Personal Consumption Expenditures (PCE) price index showed a 0.2% increase in the past month, with a 2.6% rise over the last 12 months.
These figures mirror the predictions of economists surveyed by Reuters.
The core PCE index, excluding volatile food and energy components, also rose by 0.2% last month.
This slowdown in the annual core PCE index to 2.9% indicates a shift towards pre-pandemic inflation levels, close to the Federal Reserve’s 2% target.
LatAm currencies gain strength
As a result, currencies like the Brazilian real, Mexican peso, and Colombian peso gained strength against the dollar. However, U.S. Treasury yields exhibited some volatility.
In late trading, the dollar weakened not only against emerging market currencies but also against major currencies.
The U.S. dollar index, measuring its performance against a basket of six major currencies, fell to 103.430.
This downward trend of the U.S. dollar against the real and other currencies indicates a complex interplay of global economic conditions.
It reflects the influence of U.S. economic policies and data on global currency markets, highlighting the interconnected nature of international economies and financial systems.