The Brazilian real weakened toward 5.30 per dollar, marking a six-week low, as persistent global inflation fears and a broad flight to safe-haven assets outweighed hawkish signals from Brazil’s resilient labor market. Investors reacted to an unexpected loss of 92,000 US jobs, a sign of a cooling global economy that pressured emerging-market currencies even as the dollar index pulled back from recent highs.
The risk-off mood has been reinforced by escalating tensions in the Middle East and Israeli airstrikes on Iranian infrastructure, which have kept Brent crude prices elevated near $90 per barrel and rekindled inflation concerns. At home, Brazil’s record-low unemployment rate of 5.4% and stubbornly high mid-month inflation readings suggest the Central Bank may keep its Selic rate at a restrictive 15%. However, the appeal of these high yields is being overshadowed by geopolitical instability. As a result, the real remains on track for a steep weekly loss as investors continue to favor the US dollar.
