U.S. Currency Drops 0.35% Against Real Amid Trade Policy Uncertainty

The U.S. dollar extended its losses against the Brazilian real for the fourth consecutive day. President Trump’s comments on foreign trade tariffs drove the decline.

Reuters reported this development on January 23rd. The greenback closed at 5.9255 reais, down 0.35% from the previous day’s close. Trump’s remarks at the World Economic Forum in Davos sparked the dollar’s weakness.

He claimed that import tariffs on various countries would bring “billions, even trillions” to the U.S. Treasury. The president also expressed hope for a fair relationship with China’s Xi Jinping.

The dollar’s intraday low reached 5.8745 reais, a 1.21% drop. This decline mirrored global trends. The DXY index, which measures the dollar against six major currencies, fell 0.12% to 108.052 points.

Trump’s recent actions have weakened the dollar against the real since his inauguration on January 20th. The U.S. currency has lost over 2% of its value in just four days. Earlier this week, Trump hinted at 25% tariffs on Mexican and Canadian imports starting February 1st.

U.S. Currency Drops 0.35% Against Real Amid Trade Policy Uncertainty. (Photo Internet reproduction)

However, concerns about Brazil’s public finances limited the dollar‘s losses. News of a potential government program to provide low-cost food through a popular supply network surfaced.

This development worried investors. This plan aims to combat inflation and boost the government’s popularity. The market remains cautious about Brazil’s fiscal trajectory and public debt.

These domestic factors continue to influence the real’s performance against the dollar. Investors closely watch both U.S. trade policies and Brazilian economic measures for future currency movements.