Brasília – The United States dollar closed on a bullish note this Wednesday (7th), at R$ 2.314 (sale), once again reaching its highest level since March 31st, 2009, when it sold for R$ 2.319. The dollar was up 0.65% from Tuesday (6th), when it closed at R$ 2.299.
The Brazilian Central Bank governor Alexandre Tombini had said last Tuesday that the monetary authority might hold a ‘line auction’ (sale with a commitment to repurchase) to curb the US currency hike. However, the bank did not intervene in the exchange rate this Wednesday.
The financial market is experiencing turmoil due to prospects that the Federal Reserve (Fed, the American Central Bank) may cut down monetary stimulus to the country’s economy.
The bank may raise interest rates and reduce the supply of dollars to the world economy, in case it deems that employment and production have not recovered in the US. The interruption of currency injections would affect international liquidity, causing the dollar to appreciate.
Following a meeting held last week, the Fed announced that the American economy keeps recovering, but still requires support. Stimulus is expected to end before the year is through.
*Translated by Gabriel Pomerancblum
