The dollar is melting after the US central bank’s message; See how much – Money Times

After showing strong volatility and running without one direction, the Dollar on the horizon Losses accelerate to R$5.20 after the monetary policy decision of the… Federal Reserve (feed itCentral Bank of America).

As expected, the monetary authority raised the interest rate by 0.25 percentage points (pp), to range between 4.75% and 5.00%. However, a message from the Federal Reserve makes the market recalculate course.

At around 4:30 pm (Brazilian time), the greenback fell 0.5% against the real, at R$5.21 for sale, reaching as low as R$5.20.

Already the futures contract due in April fell 0.5% to R$5.23. Overseas, after falling more than 1% and at its lowest level since the beginning of February, the Dollar Index (DXY) suffered losses of 0.9%, at 102.3 points.

Why does the dollar fall so much?

About the chief economist at Activate investments, Ettore Sanchez, The Fed’s statement “was well thought out, but arguably marginally ‘peaceful'”. “Authority [monetária] He has proven to hate inflation and has remained steadfast in his goal of price stability,” he comments.

StoneX Market Intelligence Analyst Lionel Matos confirms that the Fed has changed the tone of its statement, removing reference to the need to raise interest rates on an ongoing basis.

“Just indicating that some monetary tightening is going to be necessary, so that the market understands that the Fed has ended the cycle of rate hikes,” says Matos.

He adds that investors are “resetting positions” in risky assets. As a result, major currencies emerging countries Appreciate for the dollar.

About the recent banking crisis that started in weSanchez, of Atieva, assesses that the Fed’s tone also “sounded rather dovish,” with the intense monitoring opening up room for skepticism.

“However, the central bank has made it clear that the crisis will lead to credit constraints and will affect activity and inflation,” it highlights.