The USD to BRL exchange rate maintains a bearish bias.
The key drivers include:
- The Federal Reserve's anticipated rate cuts may weaken the USD by mid-2026.
- The Brazilian Central Bank is considering lowering its benchmark interest rate from 15% due to pressures on government finances and inflation control.
- Global economic growth and rising commodity prices, including oil, could influence both currencies and add volatility.
In the near term, the USD/BRL is expected to trade within a stable range, reflecting recent movements around 5.3734, slightly below the 3-month average.
Upside risks for the BRL could arise from strengthening global commodities, while downside risks include political uncertainties surrounding Brazil’s 2026 elections, which may further affect investor confidence.