FX.co ★ Brazilian Real Hovers Near Early-June Lows

The Brazilian real remained around 5.55 per USD, echoing lows last seen in early June, as investors weighed the implications of potential significant U.S. tariffs amidst escalating political instability. President Trump's declaration of imposing a 50% tariff on Brazilian exports starting August 1st has dampened confidence in Brazilian assets. This uncertainty lingers despite Treasury Secretary Bessent hinting at a possible 90-day reprieve for China and other trading partners. Domestically, the real's depreciation is aggravated by political unrest, including the Supreme Court's investigation into allegations of election interference by former President Bolsonaro, and his legal team's swift appeals to Justice Moraes. This turmoil has raised questions about Brazil's capacity to implement critical fiscal and pension reforms in the face of persistently large primary deficits. On a global scale, a stronger U.S. dollar and rising Treasury yields have further pressured emerging-market currencies.