Brazilian Real Strengthens to 5.12 per Dollar as Inflation Tops 4.47%

3 articles · Updated · TradingView · Sep 25

Brazil’s real firmed to 5.12 per U.S. dollar after mid-month September inflation came in hotter than expected, reinforcing bets that domestic rates may stay higher for longer.
IPCA-15 inflation rose to 4.47% year over year from 4.24%, above the 4.30% consensus and back above the upper end of the central bank’s target range.
That reading clouds the outlook for further Selic cuts after the BCB trimmed its policy rate by 25 basis points to 13.75% this month and signaled no fixed path, while Copom minutes struck a hawkish tone.
Oil prices eased, softening some energy pressure, but the external backdrop remained difficult as elevated global yields and the Fed’s latest rate hike kept the dollar supported through a narrower rate differential.