Positive day for the Brazilian markets, contrary to the overall tone of the day.

The Ibovespa, main index of Brazil, rose 0.17% to 127,129 points, while the dollar advanced 0.20%, trading at R$ 5.035.

The dollar opened higher this Tuesday (19), with all eyes still focused on the Federal Reserve meeting, the US central bank, which is expected to announce its interest rate decision on Wednesday (20).

In the Brazilian stock market, the Ibovespa also rose, still driven by a sharp increase in Vale’s shares.

The Ibovespa rose 0.17% to 127,129 points, while the dollar advanced 0.20%, trading at R$ 5.035.

The behavior of the dollar was in line with what was seen abroad, where the index measuring the performance of the US currency against a basket of six currencies rose 0.30%, to 103.890.

In the local scenario, the expectation is that the Central Bank of Brazil is likely to implement a 0.50 percentage point cut in the Selic (benchmark interest rate), maintaining the pace adopted in the last meetings.

As for the Brazilian stock market yesterday, it ended the day with a slight increase of 0.16%, reaching 126,954 points, driven by strong gains from Vale and Embraer, which were among the most traded stocks of the session.

The Federal Reserve begins its two-day monetary policy meeting on Tuesday, where it is expected to keep interest rates steady, according to market forecasts. Investors will be watching for clues from Fed officials about their next steps, at a time when many traders have delayed bets on when the central bank will make its first rate cut due to US inflation resilience.

Along with the monetary policy statement, the Fed will release its so-called “dot plot” on Wednesday, which gathers officials’ projections for variables such as inflation, growth, and, most importantly for the markets at the moment, interest rates.

If you have high interest rates in the United States –which would be a place where you have less risk with high interest rates– you have a strong tendency for flow to concentrate there.

That’s why we’ve seen this rise in the dollar in the last two, three months; because the predictions of a drop in interest rates in the US ended up being postponed.