01.04.202517:03:31UTC+00Brazilian Real Rebounds

The Brazilian real has appreciated to approximately 5.68 per USD, nearing its strongest point since November 2024 at 5.65, a level that was last seen on March 19th. This upward movement is bolstered by a weakening dollar alongside improving domestic conditions in Brazil. A major factor contributing to this trend is the anticipation that increased U.S. trade protectionism will heighten inflationary pressures, impacting U.S. Treasury yields and weakening the dollar, thereby making emerging-market currencies such as the real more appealing. Additionally, Brazil's inflation outlook has shown signs of improvement, with the IPCA forecast for 2025 being adjusted downward to 5.7%. This revision strengthens the belief that the Central Bank of Brazil will maintain a cautious approach to its monetary policy. Further supporting the currency, Brazil's manufacturing PMI has remained in expansion mode at 51.8, driven by a surge in international orders, indicating robustness in critical export sectors. Despite lingering uncertainties over potential retaliatory actions against U.S. tariffs, the influx of foreign capital into Brazil, attracted by comparatively high real interest rates, continues to favor the real.