FX.co ★ Brazilian Real Rises to Over 2-Year High

The Brazilian real appreciated to 4.95 per dollar, its strongest level since March 2024, supported by higher oil prices and expectations of persistently elevated interest rates. The ongoing conflict between Iran and the US has disrupted oil shipments from the Middle East for nearly two months, driving up global energy prices and boosting foreign exchange inflows for alternative energy exporters such as Brazil. At the same time, the inflationary risks stemming from more expensive energy prompted the Central Bank of Brazil to halt its previously signaled path of multiple rate cuts, increasing the appeal of Brazilian fixed-income assets to foreign investors. Taken together, these factors strengthened the real despite the typical flight to safe-haven assets during periods of heightened geopolitical tension.