By: StoneX Intelligence Brazil, StoneX Intelligence Brazil
Data for inflation in the United States may reinforce that the Federal Reserve must maintain its interest rate hike cycle for longer, strengthening the US currency.
European Central Bank should readjust its key interest rate by 0.50 p.p., contributing to the strengthening of the euro at the expense of other currencies.
Fears of a credit crunch in Brazil could spark a search for safe assets and weaken the Brazilian real.
The expectation for the proposed fiscal framework may reinforce the willingness of the economic team to rebalance Public Accounts and favor the BRL strengthening.
The USDBRL ended Friday's session (10) practically stable, quoted at BRL 5.208, a variation of +0.1% in the week, -0.3% in the month and -1.4% in the year. The dollar index closed the session at 104.6 points, an increase of 0.1% in the week, a retreat of 0.2% in the month and a gain of 1.3% in the year. The week was marked by rising expectations for interest rates in the United States after statements by Federal Reserve (Fed) Chairman Jerome Powell to the US Congress and by expectations for news related to the Brazilian government's new fiscal framework.
Expected impact on USDBRL: bullish
This week, attention will be on the February Consumer Price Index (CPI) publication next Tuesday. After a string of indicators that exceeded expert estimates in January, there is a debate among analysts whether inflation has become more persistent (sticky) and widespread than anticipated, which in turn caused doubts about which would be the best monetary policy decision for the Federal Reserve on March 22: to repeat a rise of 0.25 p.p. or raise the pace to a readjustment of 0.50 p.p. The February indicators released so far have not been striking enough to define the best strategy clearly.
Last week, Fed Chairman Jerome Powell struck a firm and cautious tone in his remarks to Congress, warning that the path to inflation reduction will be bumpy, that the latest economic indicators suggest the US interest rate ceiling will be higher than previously estimated and said the Fed is prepared to accelerate the pace of interest rate adjustments if the totality of the data warrants such a move. These comments resulted in a rapid rise in bets on the US interest rate futures market, reaching their highest value since the current monetary tightening cycle began.
Thus, the publication of the CPI on Tuesday (14) will provide a fundamental reading for the state of inflation in the country and allow us to anticipate the next Fed decision. Analysts expect the core CPI to remain warm, with monthly growth of 0.4% and a cumulative 12-month high of 5.6%, identical to January. The most relevant subgroup will be core services ex shelter, which is highly correlated with gains in labor income and which, in recent months, represents most of the acceleration in prices. Complementing the reading of the US context is the release of the producer price index (PPI) and retail sales for February, both on Wednesday (15).
Expected impact on USDBRL: bullish
Next Thursday (16), there will be a decision on monetary policy by the European Central Bank (ECB). There is a reasonable consensus that the European institution should readjust interest rates by 50 basis points, from 2.50% p.a. to 3.00% p.a., since the ECB itself anticipated such a readjustment in its last decision. After taking significant time to start its cycle of interest rate hikes, the European monetary authority has implemented sizeable readjustments to contain rapid inflation and narrow the yield differential with the United States. It remains to be seen whether the ECB members will commit to signaling another 0.50 p.p. readjustment for the next decision or whether they will adopt a more cautious stance without indicating any future trend.
Expected impact on USDBRL: bullish
Last week, the DI future interest rate retreated considerably, indicating that investors are betting on cuts in the basic interest rate (Selic) by the Central Bank starting in the first half of this year, dropping to 13.00% by December 2023 and 12.50% by July 2024. Among the reasons pointed out for the bets on the reduction of basic interest rates by the central bank would be a worsening of the balance of risks that the Monetary Authority faces, particularly due to the indication that the private credit market (debentures) would be showing incipient signs of a possible crisis. Since the outbreak of the Americanas case, investors have been withdrawing their investments in private equity securities, making it more difficult for companies that need to raise funds in the fixed-income market and, consequently, raising the cost of this financing. Thus, analysts bet that the central bank would be pressured to reduce basic interest rates to avoid premature insolvency of cash-strapped companies.
These fears intensified last Friday (10) after the collapse of SVB bank in the United States, the first bank to be closed in the country since the 2007 financial crisis. SVB, the 16th-largest financial institution in the country and focused on capitalizing on start-ups, suffered a federal intervention after the bank's board announced that it would try to raise USD 2 billion due to a significant loss in its portfolio. The announcement alarmed its account holders, who rushed to withdraw their investments and deposits with the bank, accelerating its collapse. Analysts fear that the episode will amplify investors' risk aversion and make it even more difficult to finance companies more exposed to the new macroeconomic environment of rapidly growing interest rates and falling consumer spending.
Expected impact on USDBRL: bearish
Another reason for the bets on the reduction of basic interest rates by the Central Bank is the optimism of market agents that investors will well receive the new proposal for the government's fiscal framework, will indicate a greater commitment to fiscal responsibility and, as such, will allow a reduction in inflationary forecasts. Last week, the Minister of Planning and Budget, Simone Tebet, reinforced that the new rules will be "fiscally responsible, with the primary deficit, with the stabilization of the debt/GDP," but without compromising the level of public investments. The Minister of Finance, Fernando Haddad, declared that he is "socializing [the proposal] with the economic team" and will present it to the president of the Republic, Luis Inácio Lula da Silva. The government's goal is to send the proposal along with the 2024 Budget Guidelines Law, whose deadline for submission to the National Congress is April 15. However, it is unknown whether some details of the measure will be presented in advance to the press.
The StoneX Group Inc. group of companies provides financial services worldwide through its subsidiaries, including physical commodities, securities, exchange-traded and over-the-counter derivatives, risk management, global payments and foreign exchange products in accordance with applicable law in the jurisdictions where services are provided. References to over-the-counter (“OTC”) products or swaps are made on behalf of StoneX Markets LLC (“SXM”), a member of the National Futures Association (“NFA”) and provisionally registered with the U.S. Commodity Futures Trading Commission (“CFTC”) as a swap dealer. SXM’s products are designed only for individuals or firms who qualify under CFTC rules as an ‘Eligible Contract Participant’ (“ECP”) and who have been accepted as customers of SXM. StoneX Financial Inc. (“SFI”) is a member of FINRA/NFA/SIPC and registered with the MSRB. SFI is registered with the U.S. Securities and Exchange Commission (“SEC”) as a Broker-Dealer and with the CFTC as a Futures Commission Merchant and Commodity Trading Adviser. References to securities trading are made on behalf of the BD Division of SFI and are intended only for an audience of institutional clients as defined by FINRA Rule 4512(c). References to exchange-traded futures and options are made on behalf of the FCM Division of SFI . StoneX is a trading name of StoneX Financial Ltd (“SFL”). SFL is registered in England and Wales, Company No. 5616586. SFL is authorized and regulated by the Financial Conduct Authority [FRN 446717] to provide to professional and eligible customers including: arrangement, execution and, where required, clearing derivative transactions in exchange traded futures and options. SFL is also authorised to engage in the arrangement and execution of transactions in certain OTC products, certain securities trading, precious metals trading and payment services to eligible customers. SFL is authorised & regulated by the Financial Conduct Authority under the Payment Services Regulations 2017 for the provision of payment services. SFL is a category 1 ring-dealing member of the London Metal Exchange. In addition SFL also engages in other physically delivered commodities business and other general business activities which are unregulated and not required to be authorised by the Financial Conduct Authority. StoneX Group Inc. acts as agent for SFL in New York with respect to its payments services business. StoneX APAC Pte. Ltd. acts as agent for SFL in Singapore with respect to its payments services business. ‘StoneX’ is the trade name used by StoneX Group Inc. and all its associated entities and subsidiaries.
Trading swaps and over-the-counter derivatives, exchange-traded derivatives and options and securities involves substantial risk and is not suitable for all investors. Past performance of any futures or option is not indicative of future success. Indicators are not a trading system and are not published as a specific trade recommendation. The information herein is not a recommendation to trade nor investment research or an offer to buy or sell any derivative or security. It does not take into account your particular investment objectives, financial situation or needs and does not create a binding obligation on any of the StoneX group of companies to enter into any transaction with you. You are advised to perform an independent investigation of any transaction to determine whether any transaction is suitable for you. No part of this material may be copied, photocopied or duplicated in any form by any means or redistributed without the prior written consent of StoneX Group Inc.
© 2026 StoneX Group Inc. All Rights Reserved.
Our subscribers have access to comprehensive market analysis from StoneX spanning commodities, equities, currencies and more.
A softer run of U.S. data is doing more to move the U.S. dollar than any chart, with a jobs report and an inflation print set to land back to back. A cooler U.S. CPI report would hand the Federal Reserve room to ease, and that prospect is already loosening the dollar's grip.
The euro-dollar has bounced off multi-year support, but the more important shift is happening in interest rate expectations. As bets on another Federal Reserve rate hike fade, the U.S. dollar is quietly losing the tailwind that carried its recent strength.
The U.S. dollar is the single biggest swing factor for gold and silver, and its long-term trend is now being tested. A confirmed turn in the dollar could reset the outlook for precious metals, either capping them further or opening room toward new records.
Our market expertise, advanced platforms, global reach, culture of full transparency and commitment to our clients’ success all set us apart in the financial marketplace.
Reach
With access to 40+ derivatives exchanges, 180+ foreign exchange markets, nearly every global securities marketplace and numerous bilateral liquidity venues, StoneX’s digital network and deep relationships can take clients anywhere they want to go.
Transparency
As a publicly traded company meeting the highest standards of regulatory compliance in the markets we serve, our financials and track record are matters of public record. StoneX’s commitment to “doing the right thing over the easy thing” sets us apart in the industry and helps us build respect, client trust and new partnerships.
Expertise
From our proprietary Market Intelligence platform to “boots-on-the-ground” expertise from award-winning traders and professionals, we connect our clients directly to actionable insights they can use to make more informed decisions and achieve their goals in the global markets.
