The dollar witnessed the largest weekly decline since November due to the adjustment of the global currency

Bank of America’s year-end estimates are for a nominal exchange rate of 5.70 riyals to the dollar – an increase of 2.27% to the dollar and a decline of 2.22% to the riyal.
Modification

São Paulo (Reuters) – The dollar closed slightly lower and close to Friday’s lows, with sales at the last extension of the session driven by continued profit-taking in the North American currency, which accumulated the largest drop in most. Two months ago.

The currency is making four consecutive lows that have brought it below at least two technical supports. If it fails to return above these lines, more sell orders may be triggered, leaving the dollar vulnerable to further declines.

The week was one of the important technical adjustments for the dollar in the world, which also led to a correction in Brazil, as the market discusses the pace of a possible hike in US interest rates. For example, foreign investors on B3 this week through Thursday (latest data available) sold $1.7 billion between dollar futures, coupon foreign exchange and traditional forex swaps.

The data suggests that speculators operating at the Chicago Mercantile Exchange may have continued their move to reduce bets against the Brazilian currency. At the turn of the year, this group of financial agents – usually operating with riskier and often directional positions – made the largest net buying of the riyal in about a month.

“According to our 2022 aggregate return forecast, the Russian ruble, Russian ruble and Thai baht are expected to be the top three performing currencies in 2022,” Bank of America strategists said in a report, which sees these currencies as “cheap.”

Bank of America’s year-end estimates are for a nominal exchange rate of 5.70 riyals to the dollar – an increase of 2.27% to the dollar and a decline of 2.22% to the riyal. However, the total returns also include forward interest rates, which are based on the economy’s primary interest rate (Selic).

The implied yield on one-year spot exchange rate futures (NDFs) is around 11.4% annually, the highest level since late 2016.

At the end of Friday, the dollar in cash fell 0.29% to 5.5125 riyals offered for sale, the lowest level since November 16 of last year (5.4999 riyals).

The currency fluctuated during the trading session between a rise of 0.46% at 5.5541 riyals and a decline of 0.35% at 5.5090 riyals.

Friday’s decline was the fourth in a row, a period in which the dollar lost 2.82%. The currency has not fallen for four consecutive trading sessions since August last year.

In the week, the dollar accumulated a depreciation of the currency by 2.12%, which is the strongest since the decline of 2.12% recorded in the week ending November 5, 2021.

In 2022 so far, the dollar has fallen by 1.09%.