Brazil's real depreciated 0.25% against the U.S. dollar on Monday as investors weighed the potential impact of new U.S. sanctions targeting Iran, while domestic political uncertainty added pressure to the currency. The spot dollar rose to R$5.1546 at 10:07 Brasília time, up from Friday's close of R$5.1417, according to B3 data.
The U.S. Department of the Treasury is poised to broaden secondary sanctions aimed at entities and countries maintaining commercial ties with Iran, a move driven by the Trump administration to intensify economic pressure on Tehran. U.S. Treasury Secretary Scott Bessent was scheduled to outline further details in a press conference at 14:00 Brasília time.
The dollar's broader strength was reflected in the U.S. Dollar Index, which climbed 0.13% to 98.935, while the September B3 dollar futures contract, the most liquid, advanced 0.35% to R$5.1640.
Political jitters in Brazil compounded the currency's decline, with recent polls showing a tightening race in the October presidential election. A Datafolha survey published Friday indicated President Luiz Inácio Lula da Silva (PT) leading Senator Flávio Bolsonaro (PL) 47% to 43% in a hypothetical second round, within the poll's 2-percentage-point margin of error. A separate BTG/Nexus poll released Monday showed Lula at 46% and Bolsonaro at 45%, also within the margin of error, underscoring the race's volatility.
