FX.co ★ Brazilian Real Steady Around 8-Month Highs

In June, the Brazilian real stabilized at approximately 5.49 per USD, maintaining proximity to its strongest level in eight months of 5.491 reached on June 19th. This stability occurred as investors absorbed the latest central bank minutes amidst a weakening US dollar. Domestically, the minutes from Copom suggested a forthcoming pause in the Selic rate's tightening cycle, indicating that rates will stay at 15% for an extended period to facilitate inflation alignment. This move aims to set expectations and preserve Brazil's appealing real interest-rate differential. Internationally, President Trump's declaration of a ceasefire between Israel and Iran, along with Iran's measured reaction that left the Strait of Hormuz flows undisturbed, mitigated oil-price spikes. This, in turn, reduced safe-haven demand and weakened support for the US dollar. Additionally, robust exports of commodities, fueled by recent strength in iron ore and soybean prices, have bolstered trade-balance inflows, providing significant support to the real.