Brazilian Real Tumbles to 8-Week Lows

2025-12-09 14:35 By Felipe Alarcon 1 min. read

The Brazilian real depreciated past 5.43 per US dollar to eight-week lows as renewed political uncertainty reignited fiscal concerns and raised broader questions about the sustainability of fiscal responsibility.

Senator Flávio Bolsonaro’s return to pre candidacy restored a sizable political risk premium and intensified doubts about the opposition’s cohesion and the durability of any market friendly fiscal compact, prompting foreign investors to trim real exposure.

At the same time markets are positioning ahead of two major policy events this week, the BCB’s Copom decision on Selic and the Federal Reserve announcement in the United States, leading dealers to hold liquidity until there is clearer guidance on rates and interest differentials.

Domestic data have not helped sentiment since Focus survey readings only nudged inflation and growth expectations slightly, keeping forecasts for a high Selic unchanged while leaving real rates exposed to compression if future cuts gain traction.



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