As The Dollar Pushes To 5.52, Brazil’s Real Gets Repriced

Key Points

• $1 traded near 5.52 reais, the highest since Oct. 13 on the charts, extending a four-day rise.
• Brasília’s 2026 politics and a tax-benefit bill weighed as DXY stayed firm into U.S. CPI and key central-bank decisions.
• Momentum is strong but stretched: 4-hour signals look overbought while the daily trend improves, with 5.50–5.55 in focus.

Brazil’s real opened weaker on Thursday, with $1 near 5.52 reais. The move followed Wednesday’s fourth straight advance. Spot rose 1.07% to about 5.5223, the strongest dollar level versus the real since early August.

The most-liquid January futures traded around 5.5350. Even after the pop, the dollar is still down roughly 10.63% in 2025.

Talk of Senator Flávio Bolsonaro as a possible 2026 presidential candidate resurfaced, forcing traders to revisit election scenarios and what they might mean for fiscal policy.

Western Asset’s Adauto Lima said the setup investors had been pricing shifted with Flávio Bolsonaro’s entry. President Luiz Inácio Lula da Silva heightened the mood with remarks calling 2026 the “year of truth,” urging ministers and allied parties to decide which side they are on.

Fiscal policy was also in the mix. The Chamber of Deputies approved a bill cutting certain federal tax benefits by 10% and increasing taxation on betting firms and fintechs, sending the proposal to the Senate.

Outside Brazil, the global dollar was firmer. DXY was up about 0.17% as markets waited for U.S. CPI and watched decisions from the BoE, ECB, and BoJ.

NAB strategist Ray Attrill said he expected a “generally stronger dollar” backdrop. Risk signals were mixed: tech nerves tied to AI volatility, while oil firmed on sanctions headlines.

On the desk, Ourominas director Elson Gusmão cited global dollar strength and “domestic caution,” noting year-end outflows can amplify moves.

Technically, the 4-hour RSI is near 71 (overbought) versus a daily RSI near 66 with a positive MACD; traders are watching 5.50–5.52 as the pivot, 5.53–5.55 as resistance, and 5.46 then 5.40 as pullback supports.

The UUP dollar ETF showed about -$63m in five-day flows and roughly +$82m over three months (posted Dec. 16).

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