Brazilian Real Holds Strong After GDP

2025-12-04 14:17 By Felipe Alarcon 1 min. read

The Brazilian real appreciated past 5.29 per US dollar toward May 2024 highs as markets absorbed the third quarter GDP print alongside a broadly softer US dollar.

GDP rose 1.8% year on year in the quarter, the softest expansion in over three years, a clear sign the economy is cooling and increasing the probability the central bank will begin easing from near two decade high policy rates in the months ahead.

That cooling is visible across goods and services even as the central bank’s governor has warned the slowdown remains gradual.

At the same time a tight labour market and sustained real wage gains keep household income and tax receipts resilient which moderates near term fiscal pressure and reduces the chance of abrupt policy shifts.

At the same time, the US dollar remained broadly subdued amid near certainty the Federal Reserve is due to cut rates next week, amplifying Brazil’s carry trade advantage and providing a solid footing for the real.



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