08.02.201819:50:00UTC+00BRAZIL: Ibovespa Falls Amid Volatility And Rate Hike Repricing In The U.S.

Ibovespa, the benchmark stock index in Brazil, closed down 1.49% at 81,532.53 points Thursday, tracking the volatility of the markets in the United States after William Dudley, a vice-president of the Federal Reserve Bank, has hinted a possible rate hike in March amid signs of acceleration in the country's economy.

"The index has operated with strong volatility amid the bad mood abroad," said Rafael Passos, an analyst at Guide Investimentos.

According to Codepe Corretora's chief economist, Jos? Costa, the ten-year U.S. interest rate hike made room for capital outflows and greater risk aversion in the market as a whole.

"The truth is that as long as there is no first meeting with the new Fed chairman, and with these economic conditions, the market will speculate. No one knows what his style is, whether he will raise [rates] by 0.25 percentage point or 0.5," Costa said.

For Friday, the bearishness in the U.S. markets, which fell more than 2%, could cause the Ibovespa to start lower, the analysts said.

The locally traded U.S. dollar closed higher for the second straight session, with gains of 0.12%, to R$ 3.281, on another day of volatility amid fears that the rate hike cycle expected in the United States for this year might be greater than previous estimates.