On Monday, the dollar held steady against the Brazilian real as investors observed upcoming US inflation figures before the Federal Reserve’s monetary policy meeting.
They also reacted to developments involving Petrobras (PETR3; PETR4). Ending the day slightly down by 0.06%, the spot US dollar traded at R$ 4.9787.
B3 dollar futures dipped 0.12% to R$ 4.986, mirroring global dollar index movements ahead of US CPI release.
Economists predict the index will report a 0.4% month-on-month rise for February and a 3.1% year-on-year increase.
Additionally, the core index excluding volatile items, is expected to climb by 0.3%, lowering the annual growth rate to 3.7%.
Matheus Pizzani, an economist, highlighted the market’s focus on this inflation data, noting the surprise negative reaction in January.
He suggested that if the inflation figures meet forecasts, the dollar’s path against the real might not see significant shifts.
However, a poor outcome, coupled with a cautious Fed, could push the dollar closer to R$5.
In the US, rising interest rates reduce the real’s appeal for carry trade strategies, which profit from interest rate differentials between countries.
Next week’s Federal Reserve decision coincides with the Central Bank of Brazil’s rate-setting meeting, where a 0.50 percentage point cut in the Selic rate to 10.75% is widely anticipated.
In addition, President Lula’s SBT interview suggests Petrobras prioritizes investment over dividends, adding market uncertainty amid financial discussions.
Petrobras CEO suggests potential 50% extraordinary dividends for 2023 at April’s shareholder meeting.
Pizzani pointed out that, while market skepticism persists, clarity on the Petrobras dividend matter could restore normalcy.
Friday’s dividend letdown spurred a 0.95% dollar surge against the real, showing corporate decisions’ effect on currency and policy.