US Dollar Climbs in Brazil Post-Carnival, Reacting to US Inflation

After Carnival, the US dollar slightly rose in Brazil, influenced by higher-than-expected US inflation, affecting its global stance.

Trading on Ash Wednesday began at 1 PM, with the spot dollar closing at R$ 4.9727, marking a 0.27% increase. This month, the dollar has gained 0.69%.

At B3, the nearest future contract for the dollar increased by 0.40% to R$ 4.9805 by late afternoon.

With Brazil’s markets closed on Tuesday, the dollar gained against major and emerging market currencies due to January’s US CPI, which rose 3.1% year-on-year, above the 2.9% forecast.

This inflation rate suggests the Federal Reserve might delay interest rate cuts to June, later than previously thought.

Despite a slight international dip on Wednesday morning, the dollar opened higher against the real.

Matheus Massote from One Investments observed, “After the dollar index’s 0.7% rise on Monday and Tuesday, an increase was expected.”

The CPI’s impact led to the dollar’s rise in Brazil, even as the dollar index fell slightly on Wednesday.

In a session of reduced hours and low liquidity, the spot dollar varied, eventually regaining strength.

By the evening, the dollar index, comparing it to six major currencies, had dropped by 0.14% to 104.710.

This reflects the complex interplay of inflation expectations and monetary policy on currency values.

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