-Thadeu Dos Santos, Regional Director at Ifinox
“The U.S. dollar eased for a second consecutive session on Tuesday after a strong rally that left it near multi-month highs, as markets positioned ahead of Wednesday’s Federal Reserve decision—an event likely to set the tone for near-term FX trading.
While no change in rates is widely expected, focus is on the dot plot and forward guidance. Recent U.S. data have been mixed, and the sharp rise in oil prices linked to Middle East tensions has added an inflation-risk layer. A less dovish message from the Fed could keep Treasury yields supported and underpin the dollar, particularly against risk-sensitive currencies. The Brazilian real faces a more nuanced outlook. Brazil’s central bank also decides policy this week, and expectations around the pace of easing have become less certain as global inflation risks rise. Higher energy prices can improve Brazil’s terms of trade and revenues, but broader risk sentiment and U.S. rate expectations remain key drivers for BRL in the near term.”
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