The Brazilian real strengthened sharply to below 5.00 per USD on Monday, hitting a 17‑month high after Flávio Bolsonaro finished ahead of President Lula in the first round of the presidential election, defying most opinion polls. Senator Bolsonaro secured 47.1% of valid votes, versus 45.1% for President Lula. Markets view Bolsonaro as more fiscally conservative, a stance that appeals to investors against a backdrop of elevated domestic interest rates and subdued business activity.
The two‑point lead gave the senator an early edge heading into the runoff. Bolsonaro outperformed the average of polls tracked by Goldman Sachs by more than four percentage points. Nevertheless, the outcome of the election remains uncertain, and the narrow first‑round margin suggests market volatility could stay high as the campaign enters its final weeks. The runoff, scheduled for October 25, will hinge on factors such as debate performances, campaign strategies, voter turnout efforts, and each candidate’s success in attracting supporters of those eliminated in the first round.
