Dollar Hits Two-Month High Against Real, Gains 6% in October

The US dollar continued its upward trend against the Brazilian real in October. The currency closed at R$ 5.7811, marking a 0.31% increase.

During trading, it reached a peak of R$ 5.7940, the highest intraday level since August. This performance contrasted with global trends.

The DXY index, which compares the dollar to six major currencies, saw a slight 0.09% decrease. Over the month, the US dollar gained 6.13% against the real.

Domestic fiscal uncertainties and the upcoming US presidential elections fueled this surge. Investors closely watched Brazil’s fiscal scenario.

They anticipated new measures to balance public accounts. Finance Minister Fernando Haddad’s recent statements about controlling public spending sparked interest.

Dollar Hits Two-Month High Against Real, Gains 6% in October. (Photo Internet reproduction)

However, he provided no timeline for implementing these measures. The Brazilian Institute of Geography and Statistics released new labor market data.

Economic Overview

Brazil’s unemployment rate fell to 6.4% in the quarter ending September. This figure, lower than the projected 6.5%, marks the lowest level since 2013.

In the United States, economic indicators shaped market sentiment. The Personal Consumption Expenditures (PCE) price index rose 0.2% in September.

This brought the annual PCE to 2.1%, nearing the Federal Reserve’s 2% target. These figures slightly undershot market projections of 0.3% monthly growth.

US jobless claims decreased by 12,000 to 216,000 in the week ending October 26. This number beat economists’ expectations of 230,000 claims.

Markets now await the monthly jobs report, set for release on November 1. Political factors also influenced currency movements.

Betting markets have increased odds for Donald Trump’s victory in the upcoming US presidential election on November 5. This shift in political expectations added another layer of complexity to the currency landscape.

These economic and political developments collectively contributed to the dollar‘s strength against the real. They highlight the intricate interplay between domestic and international factors in currency valuation.

In short, as global markets navigate these uncertainties, the Brazilian real faces ongoing pressure from a strengthening US dollar.