The dollar rises to R $ 5.41 with expectations of the Selic cut By Reuters

By Luana Maria Benedito

SAO PAULO (Reuters) – The dollar rose sharply this Wednesday after the holidays, reaching a record level above 5.41 reais amid expectations to cut interest rates, raising concern about the entry to the Brazilian markets. .

At 13:51, the dollar rose 1.77% to 5.4123 reais for sale. At the highest point of the day, the price touched the all-time high of 5.4153 reais for sale, up 1.94%.

In B3, the future dollar rose 1.76%, to 5,415 reais.

“This pull on the dollar comes with higher expectations of a cut by BC,” Jefferson Laatus, founding partner of the Laatus group, told Reuters. “Campos Neto changed his speech, making it clear that the BC could cut interest rates again.”

The President of the Central Bank, Roberto Campos Neto, said on Monday that the scenario analyzed by the Monetary Policy Committee (Copom) at its last meeting, when it evaluated that both a greater reduction in interest rates and a greater monetary relaxation could become in “counterproductive” – ​​has changed.

“What we are talking about is that we understand that the conditions we had in Copom have changed a lot since then, including inflation expectations,” Campos Neto said. At the last Copom meeting, the referee reduced the Selic rate by 0.50 percentage points, to 3.75%.

The reduction of the basic interest rate to successive minimum records has been a pressure factor on the real, since it reduces the local yields linked to the Selic rate, making the Brazilian scenario less attractive to foreign investors. This context is aggravated by the coronavirus pandemic and the recent political conflicts between the Executive and the Legislative.

Abroad, the dollar was gaining against the South African rand and the Mexican peso, emerging currency pairs. Against the Australian dollar, another risk currency, the US currency posted losses.

In the last trading session, on Monday, the interbank dollar closed 1.40%, at 5,3092 reais on the sale.

The Central Bank held traditional swap auctions of up to 10,000 contracts maturing in September 2020 and January 2021 on Wednesday, in which it sold the entire offer. [nAQN02C5PA]