Brazil’s real has continued its impressive rally, closing stronger against the U.S. dollar and gains for 11 straight sessions. This marks its longest streak of gains since April 2005. On Monday, the currency ended at 5.8159 reais per dollar, its strongest level since late November.
In early trading, the real weakened by over 1%. However, it quickly recovered after U.S. President Donald Trump announced a temporary pause on tariffs against Mexico. By the end of the session, Brazil’s currency had gained 0.3%.
Last year, Brazil’s real faced significant challenges. It lost over 20% of its value against the U.S. dollar due to investor concerns about the government's fiscal policies. Heavy outflows of foreign capital also contributed to the decline. However, since the beginning of this year, the real has gained nearly 6%, showing renewed investor confidence.
Brazil’s inflation is expected to continue easing. President Luiz Inacio Lula da Silva addressed Congress on Monday, stating that inflation should approach the central bank’s 3% target by mid-2026.
He highlighted key factors that will support this trend, including a strong grain harvest, lower electricity tariffs, and stable fuel prices. Additionally, a widening interest rate differential between Brazil and other economies may further strengthen the country’s currency.
Brazil’s economic outlook appears positive. If inflation remains under control and investor confidence stays strong, the real could extend its gains even further. Traders should closely monitor upcoming economic data and policy decisions.
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Brazil’s real gains for 11 consecutive sessions, marking its longest streak. Learn how inflation & economic policy impact the currency.
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