The Brazilian real is currently trading near a one-month high at around 4.86 per USD. This comes as the US dollar dips to a near five-month low. The greenback’s support has been waning, with more data backing the Federal Reserve’s dovish forecast for 2024.
Meanwhile, in Brazil, the trade balance remains close to record highs. This is largely due to a nearly 30% increase in the trade surplus in November. The rise in prices for commodities like iron ore and sugar, coupled with strong soybean yields, have led to an influx of foreign currency. Interestingly, the Brazilian real has seen an over 8% surge year-to-date. This is despite the ongoing cuts to the Selic rate, which currently stands at 11.75%, since August.