Dollar falls in anticipation of future interest rates in Brazil and the US; Ibovespa advances – Young Pan

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US Central Bank meets this Wednesday to discuss monetary policy; in the domestic environment, high inflation makes the market forecast a 7% Selic in 2021

Antara Foto/Hafidz Mubarak/via ReutersDollar opens the falling week awaiting debates on inflation and monetary stimulus in the US, this Wednesday

The main indicators of financial market closed in the positive field this Monday, 26, with the expectation of future interest rates in Brazil and the United States. Investors also keep political movements in Brasília on the radar with the exchange of seats in the ministries and the dissemination of the Delta variant of Covid-19. O dollar opened the week with a drop of 0.70%, quoted at R$ 5.174. The exchange rate reached the maximum of R$5.230, while the minimum was R$5.153. The US currency ended last week with a fall of 0.05%, to R$ 5.211. Following international optimism, the Ibovespa, a reference on the Brazilian Stock Exchange, ended the day up 0.76%, at 126,076 points. The trading session on Friday, 23, closed with a drop of 0.87%, at 125,052 points.

Markets around the world are beginning to analyze the signals leading up to the meeting of the Federal Reserve (Fed), the Central Bank of the United States, which this Wednesday, 28, is once again debating interest and inflation. Despite the organization’s president, Jerome Powell, having reinforced that the stimulus policy should be maintained with the purchase of government bonds and interest rates at minimum levels, the climate should remain volatile in the coming days. Also on the international scene, investors are following the increase in the number of infections with the dissemination of the Delta variant of Covid-19. The fear of the markets is that the rise in contamination rates will reflect the return of social isolation measures and a slowdown in economic recovery.

On the domestic agenda, interest rates also dominated the debate this early this week. The financial market started to see the Selic to 7% at the end of 2021, an index that should be maintained until next year, according to data from Focus Bulletin released this Monday. The median of the survey carried out by the Central Bank also indicated a worsening of the inflation scenario this year, with an increase in expectations to 6.56%, the 16th week followed by an upward revision. O Monetary Policy Committee (Copom) meets again in early August to debate the future of interest rates. The recent rise in inflation measured by the preview of the Broad Consumer Price Index (IPCA) led analysts to speculate an advance of 1 percentage point, raising the Selic to 5.25% per year, to avoid contaminating the prospects for 2022.