The US dollar remained steady against the Brazilian real after weak US economic data. These figures fueled speculation about an impending Federal Reserve rate cut.
The dollar dipped by 0.08% to 4.9687 reais, with a 0.61% increase in February.
On B3, the dollar’s future contract edged up by 0.03% to 4.9770 reais.
Poor US retail and industrial performance drove the dollar’s narrow moves. Retail sales dropped by 0.8% in January, worse than expected.
December’s sales were also adjusted down. US industrial output declined by 0.1%, missing forecasts.
Despite a drop in jobless claims to 212,000, the economic outlook dimmed.
This situation pushed Treasury yields and the dollar down globally, hinting at a possible Fed rate cut in May.
After these reports, the dollar briefly fell to 4.9581 reais but later recovered to 4.9840 reais.
Thiago Avallone of Manchester Investments highlighted intensified speculation about the Fed’s rate decision timing.
Fed Chair Jerome Powell emphasizes a data-focused approach, awaiting more economic alignment before cutting rates.
Diego Costa of B&T Exchange mentioned the global uncertainty from the US data.
This uncertainty might drive investors towards safer assets like the dollar, which has fluctuated between 4.90 and 5.00 reais.
The dollar’s slight drop in Brazil mirrored its global decline against other currencies. By the afternoon, the dollar index was down 0.37% to 104.290.
Brazil’s Central Bank successfully rolled over currency swap contracts for April earlier.
By February 9th, Brazil saw a positive foreign exchange flow of 5 million dollars, balancing outflows and inflows.