The U.S. dollar saw a decrease against the Brazilian real on Friday, influenced by U.S. inflation figures matching expectations.
This period of trading was marked by lower liquidity, particularly in the afternoon, as the market awaited Brazil’s Carnival celebrations.
Ending the day at R$4.9595, the dollar dropped by 0.72%, contributing to a weekly decrease of 0.13%.
Despite a rise of 0.43% in February, the currency exhibited signs of weakening.
In Brazil’s B3 market, the forthcoming dollar futures contract decreased by 0.64% to R$4.9720 as of 17:09 Brasília time.
After hitting R$5.00 on Thursday, investors sold dollars to capitalize on higher rates, initiating an early negative trend.
FB Capital’s director, Fernando Bergallo, noted that the market responded to the dollar hitting R$5.00, with exporters quick to sell.
News from the U.S. on the Department of Labor adjusting December’s CPI increase to 0.2% added downward pressure.
Excluding food and energy, December’s CPI remained at a 0.3% rise.
This revision eased market concerns, potentially affecting U.S. interest rates, as analyzed by Laís Costa of Empiricus Research.
Post-CPI announcement, Treasury yields, and the dollar declined, suggesting potential Fed interest rate cuts in response to revised data.
In Brazil, the dollar reached its daily low of R$4.9500 at 15:27 but regained some international strength in the afternoon.
Nevertheless, the currency continued to fall in Brazil, reaching the day’s lowest rate.
As Carnival approached, the market’s liquidity dwindled, with many traders closing their positions early.
At 17:09 Brasília time, the dollar index dipped by 0.01% to 104.120, influenced by inflation data and Brazil’s festive season expectations.