The U.S. dollar strengthened against the Brazilian real on Friday, closing at R$5.1961 for sale, a gain of 0.62% during the session. The move followed remarks from Federal Reserve Chair Kevin Warsh, who emphasized the central bank’s commitment to returning inflation to its 2% target, stating that officials must be confident underlying price pressures are moving toward the goal at a sufficient pace. Warsh’s comments reinforced expectations for tighter U.S. monetary policy, which supported the dollar’s appreciation globally.
During the trading day, the spot dollar touched a session low of R$5.1581, down 0.12%, before climbing to a peak of R$5.2315, up 1.30%. The dollar index against a basket of six major currencies rose 0.57% to 99.668 by late afternoon. The September futures contract on Brazil’s B3 exchange also advanced 0.67% to R$5.1995 at 17:11 local time.
The real’s decline coincided with weaker-than-expected labor market data from Brazil. The Caged report showed formal job creation of 58,568 in July, well below the 112,000 gain forecast by economists surveyed by Reuters. The underperformance highlighted domestic economic challenges even as the dollar strengthened broadly.
Year-to-date, the dollar has fallen 5.34% against the real, while the weekly gain stood at 1.06%. U.S. interest rates remain in a range of 3.50% to 3.75%, while Brazil’s benchmark Selic rate stands at 14%. The divergence in policy stances continues to influence currency valuations across emerging markets.
