Dollar Slides to Nine-Month Low Against Real as Policy Uncertainty and Technical Pressure Mount

The Brazilian real advanced strongly against the US dollar on June 30, 2025, reaching its firmest level since September 2024.

Official data and exchange charts confirm the dollar traded at R$5.4317 in early July, capping a three-session slide that erased nearly 5% of its value against the real in June.

Brazil’s currency gained as traders digested a confluence of domestic and international developments. The US faced renewed fiscal turbulence as Congress debated a bill that could add $3.3 trillion to the federal debt, raising the specter of further fiscal slippage.

Meanwhile, the White House signaled more aggressive tariff measures, with the current truce set to expire in early July. These uncertainties pressured the dollar globally, as reflected by the DXY index’s drop to a three-year low.

In Brazil, the macroeconomic backdrop offered mixed signals. The Central Bank reported that gross public debt edged up to 76.1% of GDP in May, but this figure undershot market forecasts.

The labor market showed some cooling, with 148,992 formal jobs created in May, below economists’ expectations. Investors interpreted this moderation as a sign that inflation pressures could ease, especially with growth projections for 2025 now at 2.2%, down from 3.4% in 2024.

Analysts expect inflation to gradually recede to 5% by year-end, supported by a stronger real and lower commodity prices. Technical analysis of the USD/BRL charts reveals a decisive bearish trend.

On the 4-hour chart, the price remains well below the 50, 100, and 200-period moving averages, confirming persistent downward momentum. The Ichimoku cloud acts as resistance, and the MACD histogram is negative, with both signal and MACD lines below zero.

The RSI sits deep in oversold territory at 24, suggesting the market may be stretched but not yet reversing. Support levels cluster near R$5.4088, while resistance remains distant at R$5.4567 and above.

The daily chart reinforces this picture. The dollar trades below all major moving averages, with the RSI at 33.4, also near oversold. The MACD remains negative, and price action sits beneath the Ichimoku cloud.

These signals point to sustained selling pressure, though the oversold readings hint at the possibility of a technical rebound if new catalysts emerge.

Brazil’s real continues to benefit from the country’s high interest rate environment, which remains among the world’s most attractive for carry trades.

The Selic rate, though expected to ease later this year, still draws capital inflows. Fiscal risks persist, but investors see little immediate threat of crisis.

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