FX.co ★ Brazilian Real at Strongest Level Since Mid-2024

In September, the Brazilian real strengthened to approximately 5.3 per US dollar, reaching its highest value since June 2024. This shift occurred as investors assessed the recent decision by the US Federal Reserve and geared up for an announcement from the Brazilian Central Bank. In September 2025, the Federal Reserve opted to reduce interest rates by 25 basis points, with Chair Jerome Powell explaining that the threat of more persistent inflation has diminished since April. He characterized this rate cut as a strategic risk management measure, not necessarily the onset of a prolonged series of rate reductions. Interestingly, only the newly appointed Governor, Stephen Miran, advocated for a more aggressive 50 basis point cut, leading to fewer disagreements within the ranks than anticipated by the market. On the domestic front, the Central Bank of Brazil is expected to keep the Selic rate steady at 15%, indicating a continued commitment to a hawkish policy to curb inflation. Recent economic indicators suggest a slow down in growth, while inflation rates remain under control, providing the central bank with the leeway to maintain stringent monetary policy despite an improving global economic environment.