Dollar falls to R$5.34 ahead of US interest rate cut

The dollar fell for a second day in a row ahead of the Federal Reserve’s (US Central Bank) decision on interest rates. The stock market started the day higher but ended lower, driven by falling U.S. stocks and profit-taking as investors sold stocks to pocket recent gains.

The trading dollar traded down R$ 0.021 (-0.38%) to R$ 5.349 today, Tuesday (26). The price had a volatile day, alternating highs and lows throughout the session, but confirmed the downward trend at the end of trading.

With today’s performance, the dollar accumulates a high of 2.18% in July and a fall of 4.07% in 2022.

The stock market was also volatile that day. The B3 Ibovespa index fell 0.5% to close at 99,772 points. Yesterday (25), the indicator closed above 100 thousand points for the first time in three weeks, encouraging investors to sell for pocket gains after the last few days. In the last eight trading sessions, the stock market fell only today and last Friday (24).

The global financial market is waiting for the central bank meeting which starts today and ends tomorrow (27). The U.S. Federal Reserve is expected to raise its benchmark interest rate by 0.75 percent to curb inflation, the lowest in the country in 41 years.

Expectations that the US economy will enter a recession have led to a fall in the dollar in recent days. That’s because investors believe the Fed will start cutting interest rates in 2023, which will lower the price of the U.S. currency in the futures market. On the other hand, expectations of a recession in the US pushed US stock markets lower, which was reflected in stock markets around the world.