Dollar Surges, Closing at Highest Rate Since July 2025
Dollar surges with inflation above expectations in the United States and domestic scenario uncertainties. Read on Gazeta do Povo.
TL;DR
- Commercial dollar closed at R$5.58, up 1.48%, highest since July 2025.
- US Consumer Price Index (CPI) rose 0.4% in October, exceeding expectations.
- Higher US interest rates could strengthen the dollar and draw investment from emerging markets.
- Brazil's Monetary Policy Committee (Copom) maintained the Selic rate at 13.75% and noted inflation pressures.
- Supply shocks contributing to inflation include rising oil prices, El Niño impacts, labor costs, and currency depreciation.
- Brazilian economic activity shows moderation, particularly in credit-sensitive sectors.
- Fiscal discipline concerns and increased directed credit could raise the neutral interest rate in Brazil.
- The risk balance for inflation remains skewed upwards, with risks of persistent inflation expectations, services inflation, and currency depreciation.