Dollar halts losing streak and closes at R$ 5,7935 on the sell side.
After its longest losing streak against the real in 20 years, the spot dollar closed Wednesday up 0,37%.
By Fabricio de Castro
SAO PAULO (Reuters) The dollar interrupted a streak of 12 consecutive sessions of declines and closed higher on Wednesday, still below R$ 5,80, with investors taking profits from recent losses in Brazil, while abroad the day saw a further fall in the US currency.
After its longest losing streak against the real in 20 years, the spot dollar closed Wednesday up 0,37%, at R$ 5,7935, its first daily gain since January 17. In 2025, the US currency has accumulated a decline of 6,24%.
At 17:04 PM on the B3 exchange, the dollar for March – currently the most liquid in the Brazilian market – was up 0,68%, at R$ 5,8205.
The dollar initially fell, but quickly moved into positive territory as investors took profits and rebuilt long positions in the US currency after recent declines. In the previous 12 sessions, the dollar had accumulated a 4,83% drop, which opened up room for profit-taking.
Thus, after registering a low of R$ 5,7501 (-0,38%) at 9:07 AM, the spot dollar reached a high of R$ 5,8184 (+0,81%) at 11:06 AM. During the afternoon, the currency came close to stability again, but still ended the day higher.
According to Rodrigo Moliterno, head of equities at Veedha Investimentos, no "effectively concrete" fact has emerged to justify the rise of the dollar against the real, other than a "correction after 12 days of decline."
"Not that this is a sign of a trend reversal. I think the trend should continue... (being) downward," he added.
Abroad, Wednesday was another day of decline for the dollar, amid the perception that the US tariff threats against Mexico, Canada and China will go through negotiations, without necessarily turning into a broader trade war.
At 15:17 PM, the dollar index -- which measures the performance of the US currency against a basket of six currencies -- was down 0,39%, at 107,630.
In Brazil, the market was also attentive to statements made by the Finance Minister, Fernando Haddad, after a meeting with the new president of the Chamber of Deputies, federal deputy Hugo Motta (Republicanos-PB). Haddad reinforced that the Income Tax (IR) reform to be proposed by the government, which provides for exemption for those earning up to 5 reais per month, will include measures to compensate for the tax waiver.
In the morning, the Central Bank sold, in its daily operation, 15.000 traditional currency swap contracts for the purpose of rolling over the maturity of March 5, 2025.
In the afternoon, the Central Bank reported that Brazil closed the month of January with a total negative exchange rate flow of US$ 6,700 billion, resulting from net outflows of US$ 4,562 billion through commercial channels and remittances of US$ 2,137 billion through financial channels. Despite the negative result, the last week of January, between the 27th and 31st, saw a positive flow, with a total inflow of US$ 1,253 billion into the country.
