Dollar Closes Flat at R$5.25 as Weak US Jobs Data and Commodity Selloff Offset Each Other

The US dollar closed Thursday’s session at R$5.2535, up a marginal 0.08%, in a volatile trading day shaped by a string of disappointing US employment data, rate decisions in Europe, and a broad-based commodity selloff.

Year-to-date, the USDBRL pair is down 4.28%, with the real supported by a historically wide interest rate differential and sustained foreign inflows into Brazilian assets.

Session Data — February 5, 2026

Performance Analysis

The pair traded without a clear direction for most of the session, oscillating between R$5.2346 and R$5.2886 before settling with a marginal gain.

The session was dominated by cross-currents: weakening US labor market data reinforced bets on Federal Reserve rate cuts, which should have pressured the dollar lower, but a sharp selloff in commodities weighed on the real as a commodity-linked currency, offsetting that support.

Over the past 30 days, the dollar has been gravitating within the R$5.20–5.30 range after pulling back sharply from its peak of R$6.09 reached in November 2025.

The real’s sustained appreciation reflects a historically elevated interest rate differential — with Brazil’s Selic at 15% versus the Fed Funds at 3.50%–3.75% — and persistent foreign inflows into Brazilian fixed income and equities.

Non-resident investors poured approximately R$12.4 billion into local assets in January alone, anchoring demand for the real.

Abroad, the DXY dollar index edged up to 97.84 but remains near six-year lows, down 9.35% over the past 12 months.

The greenback gained ground against the British pound after the Bank of England held rates at 3.75% in a split vote that markets read as dovish, but it was essentially flat versus the euro following the ECB’s decision to keep its deposit rate at 2%.

Key Drivers

The session’s main catalyst was a barrage of US labor market data that disappointed on multiple fronts. The JOLTS report showed job openings falling to 6.542 million in December — the lowest level since 2020 and well below the Reuters consensus of 7.20 million.

Initial jobless claims jumped to 231,000 for the week, against expectations of 212,000, while the ADP private payrolls report also came in below forecast. Adding to the bleak picture, January job cuts were the highest for the month since 2009.

This broad deterioration in the labor market solidified expectations that the Federal Reserve will begin cutting rates in June, with a second reduction potentially following in September.

The debate over Fed independence intensified after Treasury Secretary Scott Bessent suggested it would be up to President Donald Trump to decide whether Kevin Warsh — nominated to succeed Jerome Powell as Fed Chair in May — could be investigated for his monetary policy decisions.

In a Senate hearing, Bessent responded to Senator Elizabeth Warren’s question about protecting Warsh from political pressure by saying “that’s up to the president.”

In Europe, the European Central Bank held its deposit rate at 2% for the fifth consecutive meeting, while the Bank of England maintained rates at 3.75%.

Post-decision, traders priced in roughly a 20% probability of an ECB rate cut by September. Both holds kept the interest rate differential tilted in favor of the dollar against European currencies, limiting the DXY’s downside.

Domestically, the real faced pressure from a commodity rout, with Brent crude sliding nearly 3% to $67.55 per barrel and iron ore falling 1.73% in Dalian — both critical export commodities for Brazil.

President Lula’s comments also drew attention: he praised Central Bank President Gabriel Galípolo but reiterated that he tells the monetary authority chief daily that interest rates are too high.

Lula also signaled political maneuvering ahead of October’s state elections in São Paulo. Brazil’s January trade surplus came in at $4.343 billion, up 85.8% year-over-year but slightly below the consensus forecast of $4.9 billion.

Technical Outlook

Technical indicators point to a “Strong Sell” signal across the daily, weekly, and monthly timeframes, with USDBRL trading below all major long-term moving averages.

On the weekly chart, the pair sits below the 200-period MA at R$5.3872, confirming the structural downtrend. The weekly RSI reads 44, in neutral-bearish territory, while the MACD remains negative, indicating persistent selling momentum.

On the 4-hour chart, the RSI has recovered to 59, suggesting room for short-term sideways consolidation. The 200-period daily MA at R$5.4467 remains the key medium-term resistance overhead.

Analyst Perspectives

RBC Capital Markets has named short USDBRL as its top emerging market FX call for 2026, arguing the trade combines “fat carry, cheap valuation, and a supportive policy cycle.”

The bank projects that the roughly 10% net carry return should dominate total returns, noting the real remains the most undervalued EM currency, with a move toward the 3.60 level seen in 2018 merely closing the valuation gap.

Natalie Victal, Chief Economist at SulAmérica Investimentos, noted that the Copom minutes “leave the pace and size of the easing cycle open,” but the unanimous stance that restrictive rates remain necessary acts as a limiter.

“We continue to see the data flow throughout February as likely to strengthen the debate around acceleration at some point in the cycle,” she said.

Looking Ahead

Markets head into Friday with attention fixed on the rescheduled US nonfarm payrolls report for January — originally due February 6 but postponed by a partial government shutdown, with a new estimated release date of February 11.

The report carries added significance as it will include annual benchmark revisions that could materially alter the reading of the US labor market.

In Brazil, January’s IPCA inflation print will be the next key macro data point, while investors price in the start of the Selic easing cycle in March, with the Focus survey projecting a cut to 14.5% at the next meeting and a year-end rate of 12.25%.

This is part of The Rio Times’ daily coverage of the Brazilian real exchange rate and Latin American financial markets.

For B3 equity market context, see The Rio Times’ Ibovespa session report for the same date.

For the macro context, see Brazil’s Morning Call for the same date.