Brazilian Real Gains as Fed Holds Rates

2026-07-29 21:18 By Isabela Couto 1 min. read

The Brazilian real strengthened to 5.12 per USD from the two-week low of 5.14 reached on July 27 after the Federal Reserve held interest rates unchanged.

The decision weakened the US dollar, as roughly one-third of the market had been positioned for a rate hike.

Meanwhile, Brazil created a net 145,161 formal jobs in June, well above market expectations of 115,000, reinforcing the resilience of the labor market and supporting expectations of a more hawkish BCB.

Brazil's high interest rates have continued to support the real by boosting the appeal of local assets, as persistent inflation risks and concerns over fiscal deficits have kept the Selic at elevated levels.

In June, the BCB lowered the Selic rate from 14.50% to 14.25% but stressed that the resilience of the labor market continues to fuel services inflation.

The Copom will meet on August 4-5th to decide the next level of the Selic.



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Brazilian Real Gains as Fed Holds Rates
The Brazilian real strengthened to 5.12 per USD from the two-week low of 5.14 reached on July 27 after the Federal Reserve held interest rates unchanged. The decision weakened the US dollar, as roughly one-third of the market had been positioned for a rate hike. Meanwhile, Brazil created a net 145,161 formal jobs in June, well above market expectations of 115,000, reinforcing the resilience of the labor market and supporting expectations of a more hawkish BCB. Brazil's high interest rates have continued to support the real by boosting the appeal of local assets, as persistent inflation risks and concerns over fiscal deficits have kept the Selic at elevated levels. In June, the BCB lowered the Selic rate from 14.50% to 14.25% but stressed that the resilience of the labor market continues to fuel services inflation. The Copom will meet on August 4-5th to decide the next level of the Selic.
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