Dollar Dips Below R$6.05 Amid U.S. Market Closure

The dollar fell over 1% on Thursday, dropping below 6.05 reais in a low-liquidity session. US markets closed for former President Jimmy Carter’s funeral. Investors adjusted prices after 2024’s excesses amid an empty agenda in Brazil.

Reuters reported the spot dollar closed down 1.10% at 6.0431 reais. On the B3 exchange, the February dollar contract, currently the most liquid, declined 0.87% to 6.0775 reais at 5:02 PM.

This week, the US currency fluctuated between strong gains and losses. Global markets digested the latest news about Trump’s tariff plans. Financial agents worried about the inflationary potential of his measures.

The dollar advanced against several currencies on Wednesday, including the real. A CNN report stated that the president-elect might declare a national economic emergency. This would serve as legal justification for imposing tariffs on allies and adversaries.

On Monday, the US currency had sharply declined. The Washington Post reported that Trump’s advisors were exploring plans to impose tariffs only on critical sector imports.

Economists believe Trump’s promises could be inflationary. These include tax cuts and strict immigration control. This could keep US interest rates high and raise Treasury yields, favoring the dollar.

Global and Local Markets

Global markets also watch new US economic data. Employment figures are this week’s focus. The December jobs report will be released on Friday.

Recent indicators have shown US economic resilience. A healthy job market and inflation above the Federal Reserve‘s 2% target reduce expectations for interest rate cuts this year.

Marcos Weigt, Head of Treasury at Travelex Bank, said, “There’s concern about the heated job market, inflation’s slowed decline, and Trump’s tariff policies”.

Operators price a 95% chance that authorities will maintain interest rates at the year’s first meeting. Just over 40 basis points of cumulative cuts are expected by year-end, according to CME’s FedWatch tool.

In Brazil, the market’s main concern remains the fiscal scenario. This persists even after Congress approved several government-proposed spending containment measures late last year.

Investors doubt the government’s commitment to balancing public accounts. They demand new measures to control public debt trajectory and restore the country’s fiscal credibility.

LatAm Markets: Live Signals → — real-time movers, turnover leaders and FX across Latin America.