Last Friday, the foreign exchange market was surprised by a sale of $474 million, the second largest since late October 2019. According to specialists, this unexpected transaction was driven by high demand from banks to close their short positions in light of the growing expectation of changes in the exchange rate framework as part of the agreement with the IMF.
Amid this scenario, analysts from the consulting firm Outlier believe that what happened could be related to a massive closing of carry trade positions, both by financial institutions and other investors who joined this strategy, which influenced the behavior of the futures market for the dollar.
Regarding the behavior of the futures market, there was a significant decrease in the open interest of contracts, with nearly 130,000 contracts closed in a single session. This trend is related to a possible massive closing of carry trade positions, reflecting a market movement that is being closely monitored by investors.
On the other hand, the rise in interest rates in the market has also caught analysts' attention, as the first positions are being traded at rates higher than those of Lecap. This situation has caused the synthetic dollar-linked rate to be in negative territory, reflecting the repercussions of recent activity in the market.
As for future projections, it is expected that the Central Bank's attitude and possible modifications in the exchange rate framework under the new agreement with the IMF will have an impact on market stability. Experts point out that recent purchases could indicate certain expectations moving forward, while current uncertainty could be influencing the decrease in open positions in the market.
