FX.co ★ Brazilian Real Strengthens for 2nd Session

In late April, the Brazilian real appreciated beyond 5.7 per USD, marking its most robust position in nearly three weeks. This change followed assurances from President Trump that he would not dismiss Federal Reserve Chair Jerome Powell and indications of a substantial reduction in tariffs on Chinese goods, which alleviated a significant external concern. Meanwhile, strong commodity export flows further strengthened Brazil's external economic position. With China's reported 90% cut in US crude imports, there was a redirection of seaborne oil and soy exports towards Brazilian producers. Additionally, the rise in iron ore prices due to increased Chinese demand improved Brazil’s terms of trade. Domestically, Vice President Geraldo Alckmin’s advocacy for engaging simultaneously with both Washington and Beijing offered reassurance to exporters. Furthermore, revived momentum on the long-dormant Mercosur-EU trade agreement bolstered confidence in Brazil's macroeconomic stability, contributing additional support to the currency.