FX.co ★ Brazilian Real Eases on Political Turmoil

The Brazilian real is trending towards a rate of 5.43 to the US dollar, nearing the one-year peak of 5.39 observed on August 12th. Investors are weighing the currency's appealing carry trade potential against the backdrop of rising political tension. Domestically, attention is on the ongoing trial of former President Jair Bolsonaro, with a verdict on his involvement in the attempted coup expected this week, bringing added risk to headlines just as budget discussions for the election year begin. Concurrently, the central bank's Focus report indicated only slight changes in exchange rate predictions, maintaining end-2025 projections close to 5.55, thereby tempering expectations for lasting appreciation. On the international front, markets are focused on upcoming US inflation figures after disappointing payroll data heightened speculation about potential easing by the Federal Reserve.