By The Rio Times | Created at 2025-01-24 21:18:01 | Updated at 2025-01-31 20:59:41
6 days ago
The U.S. dollar weakened against the Brazilian real for the fifth consecutive day. President Donald Trump’s recent statements on import tariffs continued to impact the currency.
The dollar closed at R$5.9186, down 0.12% for the day and 2.42% for the week. This trend mirrored the global market. The DXY index, which measures the dollar against six major currencies, fell 0.57% to 107.474 points by 5 PM Brasília time.
Domestically, investors reacted to the IPCA-15, Brazil’s preview inflation index. It rose 0.11% in January, down from December’s 0.34% increase. The 12-month accumulated inflation reached 4.50%.
Despite showing a slowdown, these figures exceeded expectations. Analysts had predicted a 0.01% decrease for the month and a 4.36% 12-month accumulation. The market also considered potential government measures to curb food prices.
President Luiz Inácio Lula da Silva met with ministers to discuss this issue. Agriculture Minister Carlos Fávaro suggested that reducing import tariffs could make food more affordable. However, no concrete decisions have been made yet.
Brazilian Real Faces Turbulence as Dollar Surpasses R$ 6 Mark. (Photo Internet reproduction)These local developments took a backseat to the easing risk aversion in global markets. Trump’s statements once again weakened the U.S. dollar against emerging market currencies.
In a Fox News interview, Trump hinted at a possible agreement to avoid imposing tariffs on China. He acknowledged tariffs as a powerful tool but expressed a preference for not using them.
During his campaign, Trump had promised a 10% tariff on Chinese imports and similar measures against the EU, Mexico, and Canada. Contrary to expectations, the Republican president did not immediately implement these measures upon taking office.
