The USD to BRL exchange rate has recently hit a 90-day low, trading at around 5.4260, which is approximately 4.0% below its three-month average of 5.655. Analysts note that this depreciation can largely be attributed to the ongoing concerns surrounding U.S. fiscal policy and its implications for the national debt, particularly following discussions about substantial government spending. Recent data from the U.S., including an unexpected rise in job openings, has helped the dollar recover slightly from its lows, indicating the currency's responsiveness to employment metrics.
Economists emphasize that the U.S. dollar's strength is largely influenced by Federal Reserve policies, economic indicators such as inflation, GDP growth, and prevailing geopolitical tensions. The current safe-haven status of the USD could be affected by global market stability and ongoing trade disputes, notably the reciprocal tariff imposed by the U.S. on Brazilian goods during the Trump administration, which continues to weigh on the Brazilian Real.
The BRL’s performance is closely tied to commodity prices, as Brazil is a major exporter of oil and soybeans. The recent rise in oil prices, with OIL to USD reaching seven-day highs near 69.11 and trading significantly above its three-month average, could offer some support for the Real, which is sensitive to such fluctuations. However, ongoing political and economic instability in Brazil poses a risk to the currency's strength, which may lead to continued volatility.
The current exchange rate volatility ranges from 5.4260 to a high of 6.0113, highlighting the potential for future fluctuations. As such, market participants should remain vigilant to changes in both U.S. economic indicators and global commodity trends, as these will significantly influence the USD to BRL exchange rate moving forward.