Brazilian Real Hits Strongest Since May 2024

2026-02-23 14:37 By Felipe Alarcon 1 min. read

The Brazilian real appreciated past 5.16 per US dollar to hit its strongest level since May 2024 as global markets re-evaluated the attractiveness of high-yielding emerging market currencies in the wake of US trade policy shifts.

The advance was supported by the Central Bank of Brazils decision to hold the Selic rate at a historically restrictive 15%, maintaining a massive real-yield spread with January inflation at 4.44%.

This interest rate differential has intensified carry trade inflows, particularly as the US Supreme Court ruling against previous emergency tariffs initially dampened dollar demand.

Strengthening the currencies fundamental backing, Brazils January trade surplus reached $4.34 billion, driven by a 17.4% surge in exports to China and firming global oil prices.

The 15% US Section 122 surcharges now compete with the $180 billion in potential tariff refunds trickling back into the global financial system.



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Brazilian Real Hits Strongest Since May 2024
The Brazilian real appreciated past 5.16 per US dollar to hit its strongest level since May 2024 as global markets re-evaluated the attractiveness of high-yielding emerging market currencies in the wake of US trade policy shifts. The advance was supported by the Central Bank of Brazils decision to hold the Selic rate at a historically restrictive 15%, maintaining a massive real-yield spread with January inflation at 4.44%. This interest rate differential has intensified carry trade inflows, particularly as the US Supreme Court ruling against previous emergency tariffs initially dampened dollar demand. Strengthening the currencies fundamental backing, Brazils January trade surplus reached $4.34 billion, driven by a 17.4% surge in exports to China and firming global oil prices. The 15% US Section 122 surcharges now compete with the $180 billion in potential tariff refunds trickling back into the global financial system.
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Brazilian Real Hits 20-month High
The Brazilian Real touched 5.16 against the USD, the highest since May 2024. Over the past 4 weeks, US Dollar Brazilian Real lost 3.79%, and in the last 12 months, it decreased 10.36%.
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Brazilian Real Holds Strong After Price Data
The Brazilian real held around 5.2 per US dollar, testing its strongest level since May 2024 as markets parsed through the latest inflation release and renewed fiscal unease. January IPCA inflation rose to 4.44% year on year broadly in line with expectations but accelerating from December which kept price pressures and monetary policy optionality firmly in focus and tempered confidence around the timing and depth of any easing cycle. At the same time political and fiscal uncertainties resurfaced with close attention on Finance Minister Haddad’s remarks and the broader debate over fiscal trajectories and central bank governance sustaining a residual risk premium and leading foreign investors to demand greater compensation for real exposure. Softer commodity signals compounded these pressures by weakening Brazil’s external support backdrop reinforcing the pullback in the currency after its early February highs.
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