The dollar was up against the real on Thursday morning as fears about too aggressive monetary tightening by the U.S. central bank continued to impose caution, while investors digested better-than-expected economic data both in Brazil and the United States.

At 10:20 am (Brasília), the spot dollar was advancing 0.71%, at 5.2154 reais on sale.

On the B3 (BVMF:B3SA3), at 10:20 am (Brasília), the future dollar contract of first maturity was up 0.94% at 5.2370 reais.

The U.S. currency, which opened the trading session with a much more timid high, began to gain steam after 9:30 am (Brasília), after the U.S. Commerce Department reported that the country’s retail sales increased 0.3% last month, beating expectations in a Reuters poll of stability over July.

“A higher-than-expected reading suggests economic acceleration, and may motivate an expectation of a hike in U.S. interest rate futures, which directs capital flow there, driving the dollar higher against the real,” Travelex strategists said in a note.

The dollar was boosted globally earlier this week amid increasingly aggressive projections for the monetary policy stance of the Federal Reserve.

After Tuesday’s U.S. consumer inflation data surprised to the upside, markets took as virtually certain the adoption of a 0.75 percentage point interest rate hike at the Fed’s September meeting, with little chance of an even more aggressive adjustment of a full 1 point.

Further contributing to these bets, a separate reading on Thursday showed a drop in weekly jobless claims in the U.S., reinforcing a scenario of strength in the labor market. Economists believe that the Fed will need to allow for job losses if it is to succeed in its mission to reduce inflation.

The US central bank, which has already raised its basic interest rate by 2.25 percentage points since March this year, meets to deliberate on monetary policy next week, on the 20th and 21st.

In Brazil, providing some relief to investors, data showed that the Central Bank’s economic activity indicator (IBC-Br) for July rose 1.17% over the previous month, a result well above expectations.

“For the economy and for the country every improvement is welcome, despite the pressure that may come from higher interest rates for longer”, said Sergio Machado, partner and manager at Trópico, in a Twitter post about the IBC-Br result. “We cannot forget that accompanied by higher growth we have inflation losing strength.”

The Selic rate is currently at 13.75%. The Central Bank’s Monetary Policy Committee (Copom) will meet next week, on the same days as the Fed’s meeting. Most markets (60%) believe in the maintenance of basic interest rates at the current level, according to probabilities implicit in futures contracts, but a considerable 40% see the Selic rising to 14% this month.

The day before, the spot US currency fell 0.22%, to 5.1787 reais on sale.