The Brazilian real held steady around 5.24 per US dollar on Thursday, as stronger-than-expected domestic inflation data offset the impact of a firmer greenback driven by renewed hawkish bets on the Federal Reserve.
The mid-month IPCA-15 index rose 0.44% in March, surpassing market expectations and reinforcing the view that the Central Bank of Brazil will keep the Selic rate in restrictive territory to counter persistent price pressures, particularly in food and personal expenses. Although the 12-month inflation rate eased to 3.90%, it remains above the 3.0% target, prompting markets to reassess the outlook for local interest rates.
These domestic dynamics coincided with a rebound in the US dollar, as investors reacted to the end of a strike truce and Iran’s rejection of a US peace proposal—developments that kept energy-related inflation risks firmly in focus across global markets. As a result, the real continues to face headwinds from a broader flight to safety and rising US Treasury yields, even as it finds some support from expectations of a persistently hawkish domestic rate stance.
