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    Dollar closes higher with China and comes and goes locally. Understand!

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    Dollar has ebbs and flows in trading, but rises below BRL 5.10 in risk aversion on weaker China data and surprise decision (Image: REUTERS/Tingshu Wang)

    O dollar in sight closed higher, once again below R$ 5.10, following the risk aversion that prevailed abroad. Markets displayed caution amid weaker activity indicators in China in July.

    Even with the 0.3% rise against the real, trading at R$5.09 for sale, the coin North-American closed far from the highs of the trading session.

    Comes and goes

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    on day of strong volatility, the dollar fluctuated between R$5.07 and R$5.14 at the beginning of business. The dollar futures contract maturing in September rose around 0.3% to R$5.11.

    Correparti’s exchange desk manager, Guilherme Esquelbek, points out that the dollar reduced the rise in the local market as a result of the inflow of foreign investors on the Brazilian stock exchange. Even though it is a trading session with lower liquidity than normal.

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    Outside, the Dollar Index was up 0.8% above 106,500 points.

    surprise decision

    China’s indicators led the country’s Central Bank (PBoC) to take a surprise measurewith a reduction in the rate reverse buyback period – the main one to inject liquidity into the financial system -, from 2.10% to 2.00%.

    O monetary stimulus followed up with the PBoC also cutting the short-term lending rate, from 2.85% to 2.75%.

    For XP stock strategist Jennie Li, data from the Asian country made global markets increase their perception of risk in relation to the economic slowdown coming from the second largest economy in the world, at the same time that a possible recession in the United States was discussed. .

    “We see this very much reflected in the drops in commodity prices that end up affecting Brazil”, says the XP professional.

    Fed on the radar

    Even with today’s high, XP analysts reinforce that the market maintains its bet on the probability of a reduction in the rate of increase in the interest rate in the United States, with the Federal Reserve (Fed, the US central bank) coming out of two consecutive increases of 0.75 percentage point to 0.50 pp in September.

    “This may alleviate the tightening of financial conditions, which has contributed to the devaluation of several currencies against the dollar in recent months, including the real”, they comment.

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    Source: Moneytimes

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