Brazilian Real Strengthens as Dollar Trades Near R$5.43 to Start 2026

Overview

• The U.S. dollar fell about 1% to roughly R$5.43 in early trading on Friday, extending late-2025 weakness against the real.
• Carry-trade inflows tied to Brazil’s elevated interest rates continue to underpin the currency against the dollar.
• Traders also point to expectations of Federal Reserve rate cuts, U.S. fiscal and policy worries, and China’s 5% growth goal supporting commodity-linked assets.
• Brazilian interest-rate futures declined across maturities and the curve flattened, with the Jan 2031 DI rate easing to about 13.37% from 13.47%.
• The Ibovespa slipped toward neutrality near 161,295 points in a holiday-thinned session as low liquidity left markets prone to sharper moves.