The dollar extended gains against the real on Monday (25), after registering the strongest percentage rise since the beginning of the Covid-19 pandemic in the last session, with risky assets around the world suffering on fears related to increases. interest rates in the United States and economic restrictions to combat the coronavirus in China.
At 10:21 am (GMT), the spot dollar advanced 0.99%, to R$4.8541 on sale, after earlier jumping 1%, to R$4.8546.
On B3, at 10:21 am (GMT), the first-maturity dollar futures contract rose 1.09% to R$4.8625.
In the last session, on Friday (22), the spot US currency had already shot up 4.07%, to R$4.8065, the highest value since last March 24 (R$4.8311) and the strongest daily percentage increase since March 16, 2020 (+4.86%), at the beginning of the Covid-19 pandemic.
The high at the end of last week reflected fears of an even more accelerated monetary tightening in the United States, which continued to haunt the markets this morning. Several Federal Reserve officials, including Chair Jerome Powell, recently indicated that the central bank will raise interest rates by 0.5 percentage point at its May meeting, and some investors already believe in an eventual adoption of a 0 adjustment, 75 point in the current Fed cycle.
That boosted the dollar globally, both Friday and this morning, when its index against a basket of strong pairs rose 0.5%.
In the last session, the surge in the US currency was so intense that it triggered the first spot dollar auction of the year by the Central Bank. The autarchy put US$ 571 million (R$ 2.7 billion) on the spot market, which helped to keep the currency away from intraday peaks.
“Given the hostile external environment today for the real, we cannot rule out another extraordinary intervention and reinforce our view that the BC is only intervening to correct one-off distortions in the exchange rate,” Citi strategists said in a report on Monday.
In addition to still brooding over the harshest indications from Fed officials, who are now entering a period of silence ahead of their May 3-4 meeting, global financial markets were assessing China’s growth prospects, which have been threatened by tight lockdowns. of combating Covid-19.
In Shanghai, authorities erected fences outside residential buildings, sparking renewed public protests against the lockdown that is forcing much of the Chinese city’s 25 million residents to stay indoors. Meanwhile, in Beijing, residents are stocking up on groceries, fearing a lockdown.
“The possibility that a lockdown (in Beijing), similar to the one adopted in Shanghai, as the pandemic situation in the city will be enacted, lowers the price of iron ore and other metallic commodities this Monday,” the team said in a report. of macro and strategy of BTG Pactual.
That appeared to hurt most emerging or commodity-sensitive currencies on the day, even after news broke that China’s central bank will lower the reserve requirement rate (the portion of money banks must hold in their reserves) for deposits in foreign exchange rate from 9% to 8%, which will take effect on May 15th.
Currencies from the Chilean peso to the Australian dollar were trading deeply in the red, while major European bourses and Wall Street futures also fell, in a coordinated move of risk aversion.
The Central Bank will auction up to 15,000 traditional foreign exchange swap contracts in this trading session for the purpose of rolling over the maturity date of June 1, 2022.
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