SAO PAULO (Reuters) – The dollar gave up the downside seen during morning trading and began to rise against the real on Tuesday, a move in line with the strength of the US currency overseas in the wake of data in the US. stronger than expected.
At 11:49 a.m. (Eastern Time), the spot dollar was up 0.62% at 5.4910 reais, rounding out a trading session high, while dollar futures to first maturity were up 0.48% at 5,5040. Was.
According to FB Capital operations director Fernando Bergallo, the movement reflects the broader strength of the US currency in international markets. For example, the dollar index, against a basket of six strong rivals, was up 0.20% at around 11:45 pm, reversing the stability seen earlier this session.
“The main catalyst for this was the release of US retail data, again above expectations,” said Burglow.
Previously released data from the US Commerce Department showed US retail sales rose 1.7% in October. Economists polled by Reuters had expected a growth of 1.4%.
In addition, a separate Labor Department showed that import prices in the world’s largest economy jumped last month, reinforcing signs of persistent inflation.
Both the indicators may increase the pressure on the Federal Reserve (US central bank) to tighten monetary policy sooner to control inflation. The world’s largest economy, which has faced high prices amid a recovery in the aftermath of restrictions due to COVID-19, is still hit by a shortage of inputs and labour.
On Tuesday, a regional Fed chairman said the central bank should “go in a more ‘hawkish’ direction” (inclining towards less expansionary monetary conditions) in upcoming meetings to prepare if inflation does not begin to slow.
Globally, the dollar benefits from higher interest rates in the US.
Earlier, the dollar fell 0.49% to day’s low, touching 5.4301 reais on sell. Some investors attributed the devaluation to signs of easing tensions between the US and China.
(by Luana Maria Benedito)