The dollar rose against the real this Tuesday, following the recovery of the US currency abroad after stronger than expected data from the United States, while investors monitor the war in the Middle East and wait for speeches from the Federal Reserve chair, Jerome Powell.
At 10:29 am (Brasília time), the spot dollar advanced 0.51%, to 5.0626 reais on sale. On B3, the first-month dollar futures contract rose 0.47%, to 5.0730 reais.
“(The dollar) turned, following the movement abroad. The dollar index strengthened after new data from the US, supporting high interest rates there”, explained Fernando Bergallo, director of operations at FB Capital.
The dollar index – which measures the US currency's performance against a basket of six currencies – rose 0.16% to 106.430. Eventually, data released showed an increase in US retail sales in September. Families bought more vehicles and spent more at restaurants, indicating economic strength in the third quarter.
Dollar advances against the real with strong US data and tensions in the Middle East
In general, readings that show resilience in activity tend to encourage bets on higher interest rates for longer, since it is necessary to restrict the economy to control inflation. High borrowing costs in the US, in turn, often redirect investments from emerging markets to the safe US fixed income market.
In this context, the market awaits a speech by Fed Chair Jerome Powell, scheduled for Thursday, which may offer more clues about the path of monetary policy.
Furthermore, “there is still the conflict in the Middle East permeating the business, but in a marginal way”, added Bergallo.
The bombings of Gaza continued last night. Israel began an intense campaign of attacks following the Hamas attack on October 7. Israel continues to prevent the delivery of humanitarian aid to civilians.
The market's focus is now on the international community's efforts to contain the conflict, with emphasis on US President Joe Biden's visit to Israel, scheduled for Wednesday.
The day before, the spot dollar closed the day at 5.0370 reais on sale, down 1.02%.
Source: Luana Maria Benedito and Alberto Alerigi Jr. | Notícias Agrícolas
