Despite the risk inherent in equities and futures markets, the U.S Future Contract market in Brazil has its advantages, mainly because it is a market highly dependent of reasons to move. Basically, in times of political and / or economic crises, the US currency usually shows appreciation as foreign investors withdraw the dollar from the country and migrate their investments to other markets considered safer. Consequently, there is a smaller supply of dollars in Brazil, which raises the price of the currency internally.
Likewise, indicative of the recovery of the Brazilian economy, positive government news and good medium-term prospects mean that external capital returns to its positive flow mainly due to the inflow of direct investment and stock market investments (which generates the need for hedge as a way to reduce exchange rate volatility). As a result of the intensification of inflows of capital, the appreciation of the Real is observed, leading to a depreciation of the US currency.
The volatility of the market also depends on the Exchange Policy adopted by the Central Bank of Brazil. The monetary authority has a set of actions and guidelines aimed at balancing the functioning of the economy (exports, imports, impacts on sales and financial leverage of companies, production, unemployment, among others), as well as changes in exchange rates and control of foreign exchange transactions.
U.S. DOLLAR FUTURE MARKET CHARACTERISTICS
The BM&F Future contracts of Dollar is one of the most traded currency futures contracts in the world. Characterized by high liquidity, it allows the investor to start or end an operation at any time, that is, ideal for investors and day-trade speculators.
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Risk Disclosure: Futures and forex trading contains substantial risk and is not for every investor. An investor could potentially lose all or more than the initial investment. Risk capital is money that can be lost without jeopardizing ones' financial security or life style. Only risk capital should be used for trading and only those with sufficient risk capital should consider trading. Past performance is not necessarily indicative of future results.
Hypothetical Performance Disclosure: Hypothetical performance results have many inherent limitations, some of which are described below. no representation is being made that any account will or is likely to achieve profits or losses similar to those shown; in fact, there are frequently sharp differences between hypothetical performance results and the actual results subsequently achieved by any particular trading program. One of the limitations of hypothetical performance results is that they are generally prepared with the benefit of hindsight. In addition, hypothetical trading does not involve financial risk, and no hypothetical trading record can completely account for the impact of financial risk of actual trading. for example, the ability to withstand losses or to adhere to a particular trading program in spite of trading losses are material points which can also adversely affect actual trading results. There are numerous other factors related to the markets in general or to the implementation of any specific trading program which cannot be fully accounted for in the preparation of hypothetical performance results and all which can adversely affect trading results.