The Brazilian real appreciated to 5.11 per USD from 5.17 in early July, its strongest level in over three weeks, mirroring gains in other emerging market currencies as the US dollar weakened. Risk appetite improved amid indications that diplomatic talks between the US and Iran are continuing despite recent tensions, easing geopolitical concerns and curbing demand for safe-haven assets. On the domestic front, the real was further supported by data showing Brazil's annual inflation slowed to 4.64% in June, coming in below market expectations. Nonetheless, persistent risks of renewed disruptions in the Middle East and the possibility of further Federal Reserve tightening continued to cap the currency’s upside.