Brazilian Real Weakens to 1-Month Low

The Brazilian real weakened past 5.82 per USD in April, reaching a one-month low, as escalating global trade tensions triggered a sharp pullback from risk assets and weighed heavily on commodity-linked currencies.

Brazil had initially benefited from limited exposure to U.S. tariffs and its strategic role as a key agricultural and energy supplier to China.

However, China’s sweeping 34% retaliatory tariff on U.S. imports has dramatically heightened fears of a global slowdown, driving down commodity prices and eroding Brazil’s export outlook.

This external deterioration has dampened expectations for strong trade surpluses that had previously underpinned the real.

At the same time, heightened volatility is clouding Brazil’s domestic policy trajectory, with inflation expectations broadly anchored and the central bank nearing the end of its tightening cycle, the scope for additional rate hikes is narrowing.