The dollar's exchange rate against the real fell to R$4.997, a level unseen since early 2024, driven by the Iran-US ceasefire announced on April 7. Analysts link the drop to eased global risk aversion and renewed flows into emerging markets like Brazil. However, 2026 elections and public finances prompt caution.
The dollar broke below R$5 to reach R$4.997, according to experts interviewed by Folha de S.Paulo. This level echoes early 2024, despite strained Brazilian public finances and a peak of R$6.27 in December 2024.
The key trigger was the Iran-US ceasefire on April 7, which curbed global risk aversion and spurred investment rotation into emerging markets. Since Donald Trump reassumed the White House in early 2025, the dollar has fallen 18.9% against the real. Brazil's Selic at 14.75%, versus 3.5%-3.75% in the US, bolsters carry trade strategies.
"Foreign investors seek exposure to emerging markets with lower risk," says Lucca Bezzon of StoneX. Gustavo Sung of Suno Research points to the wide interest rate gap.
Market players remain wary of 2026 elections. Paula Zogbi of Nomad states: "The discussion on Brazilian public spending has not lost importance." The Focus Bulletin forecasts the dollar at R$5.37 by end-2026 and Selic at 12.50%.
