São Paulo – The Brazilian Central Bank has tried, but failed to prevent the US dollar from hiking this Friday (30th), the last trading day of the month, The currency closed the day selling for R$ 2.3830, was up 4.61% in August and 16.53% to date in 2013.
The currency started the day on a downward trend. By 11:00 am it was selling for R$ 2.35. One of the factors that were causing the dollar to drop was the announcement of Brazil’s quarter two Gross Domestic Product (GDP) result, was up 1.5% from quarter one.
The dollar bounced back and started rising towards the end of the morning, after the Central Bank rejected bids for dollar purchases and closed its sales only in the third auction of the day. The monetary authority had announced last week that it will hold daily dollar auctions from now until the end of the year, in a bid to lower prices. According to the Bank’s schedule, R$ 500 million will be auctioned from Mondays through Thursdays. On Fridays, R$ 1 billion will be auctioned.
But the auctions were not the only reason for the dollar hike seen this Friday. The market is still awaiting the next steps of the United States’ Central Bank, aka Fed, which has signalled that it will withdraw the incentives granted to the country’s economy in the next few months, seeing as the American economy has picked up. Furthermore, the possibility of an attack to Syria by the United States and European countries has also caused tension in the markets, driving up the dollar.
*Translated by Gabriel Pomerancblum
