Brazilian Real Hovers at 8-Month Highs
The Brazilian real steadied around 5.49 per USD in June, hovering near its strongest level in eight months, as investors digested the latest labor-market data while the US dollar remained subdued. Unemployment dropped to 6.2% in the three months to May, from 6.6% in April, and formal employment hit a record 39.76 million, underpinning household consumption and real incomes. The data reinforced the central bank’s decision to hold the Selic at a historic 15%, as Copom’s minutes signaled a pause in tightening—emphasizing that rates will remain at that level for a “very prolonged period” to secure inflation convergence, sustain steep real interest-rate differentials and attract carry flows. Meanwhile, the USD dropped to its weakest level since February 2022 reflecting mounting Fed rate-cut expectations amid dovish Fed commentary, reinforced by softer consumer spending and modest inflation readings.