FX.co ★ Brazilian Real at 5.50 Amid Global Risk Aversion

The Brazilian real hovered around 5.50 per USD, showing little change after weakening nearly 0.7% on November 5th amid a bout of heightened risk aversion in global markets. The pressure largely originated on Wall Street, where AI-related stocks posted sharp losses. The ensuing selloff led investors to scale back exposure to riskier assets, including emerging-market currencies, and move into the US dollar as a safe haven.

On the domestic front, fiscal conditions remain at the center of attention as investors and business leaders push the government for further adjustments and await details of President Lula’s economic agenda for his fourth term. Meanwhile, the BCB kept the Selic rate unchanged at 13.75%, pausing its easing cycle and lending some support to the real by preserving a wide interest-rate differential with the US. However, the decision also underscored a challenging outlook characterized by weaker growth, higher inflation, and increased uncertainty following Lula’s reelection.