Dollar rises on Friday, reaching R$ 4,05 amid coup fiasco.

SAO PAULO (Reuters) - The dollar closed higher on Wednesday, reaching 4,05 reais, after recent opinion polls for the presidential election showed a difficult scenario for the candidate most favored by the market, Geraldo Alckmin (PSDB), and the possibility of a second round involving the PT.

The US dollar, however, closed well below its daily high, in a correction movement also fueled by the US central bank, which reinforced its indication that it will continue to raise interest rates gradually, a move that influences global capital flows.

The dollar rose 0,46 percent to 4,0559 reais on the sell side, its highest level since February 16, 2016 (4,0705 reais). This marked the sixth consecutive day of gains, accumulating an increase of 4,89 percent.

The highest closing level for the dollar was reached on January 21, 2016, when it hit 4,1655 reais. At its peak during this trading session, it touched 4,0917 reais. The dollar futures contract was up about 0,10 percent in the late afternoon.

"Overall, the polls don't show much divergence... We're in a context where Alckmin isn't taking off," stated Roberto Indech, chief analyst at the brokerage firm Rico Investimentos.

A Datafolha poll showed that PSL candidate Jair Bolsonaro leads the presidential race with 22 percent of voting intentions when former president Luiz Inácio Lula da Silva (PT) is not in the running, followed by Marina Silva (Rede) with 16 percent. In this scenario, Alckmin has 9 percent.

Last week, polls by CNT/MDA and Ibope had already shown a similar picture, which ended up stressing the markets and pushing the dollar to the level of 4 reais. Alckmin is seen by the market as a politician committed to reforms that he considers important for the country's fiscal adjustment.

In the Datafolha poll where Lula appears as a candidate, the former president leads with 39 percent support, and 48 percent of respondents said they would not vote for a candidate endorsed by Lula, but 31 percent said they would definitely vote for one and 18 percent said maybe.

"The most plausible interpretation is that there will be an imminent second round between Jair Bolsonaro and Fernando Haddad," stated the brokerage firm H.Commcor in a report, adding that if this scenario materializes, "Bolsonaro will be the target of support from the financial market, especially from economist Paulo Guedes (coordinator of the economic program of the retired military officer)."

In Brazil, the dollar traded throughout the day in the opposite direction to the international market, where it weakened against other emerging market currencies. In the afternoon, the rise in the local market began to soften and gained further support after the release of the minutes from the Federal Reserve, the central bank of the United States, which reinforced the indication that it will continue to raise interest rates gradually.

So far, the Fed has already raised interest rates twice this year, and economic agents believe that two more increases will occur this year given the country's economic strength.

"After the surge, it's natural for the dollar to settle down a bit," argued a currency trader from a local brokerage.

The recent strengthening of the dollar against the real had already fueled assessments of a possible greater intervention by the Central Bank in the foreign exchange market, but for now, the view was that it was still too early for such a move.

"I think he should wait a little, because of external and internal news. It's a snapshot of the moment based on electoral polls," assessed Indech, from Rico Investimentos.

For now, this is what the Central Bank is doing, and in this session, it only offered and sold in full 4,8 traditional currency swaps, equivalent to the future sale of dollars, rolling over $3,84 billion of the total $5,255 billion that matures in September.

If you maintain this daily offer and sell it until the end of the month, you will have completed the full rollover.