Dollar Slips Back To 5.33 Reais As Jobs Data And High Rates Lure Investors
The dollar ended Friday trading around 5.33 reais, extending a week of losses against the Brazilian currency as investors combined a softer global dollar with stronger-than-expected domestic jobs data.
Over the week the greenback fell a little more than 1% versus the real, while the Dollar Index hovered just under 99.5, close to the bottom of its recent range.
Trading was thin. U.S. markets reopened after Thanksgiving with shortened hours, and an hours-long outage at CME’s futures platform further damped volumes.
In that quiet environment, each new piece of macro news had an outsized impact on currencies, especially in emerging markets that still offer high yields.
The key local catalyst was the labour market. Brazil’s unemployment rate dropped to 5.4% in the three months to October, the lowest reading since the current series began in 2012 and slightly better than economists had forecast.
Analysts at Goldman Sachs called the labour backdrop “tight” despite signs of slower job creation, while Itaú BBA pointed to early evidence that formal employment is losing momentum after several strong years.
Dollar Slips Back To 5.33 Reais As Jobs Data And High Rates Lure Investors
For monetary policy, that combination is delicate but market-friendly. The central bank has kept the Selic rate at a steep 15% for a third meeting, with inflation back inside the target band.
Investors see the current board as a counterweight to Brasília’s appetite for higher spending, and the new data give it room to stay cautious without being accused of choking off growth.
Structural flows also favour the real. Foreign direct investment so far this year already exceeds the full-year tally for 2024 and more than covers the current-account gap, a configuration that typically supports the currency.
On the equity side, the Ibovespa closed near 159,000 points after another strong month led by heavyweight exporters and banks, even as Petrobras lagged on a more restrained investment plan.
The main Brazil ETF in New York is trading near one-year highs, with positive cumulative inflows in recent months.
Technically, the dollar remains in a gentle downtrend from peaks above 6.30 reais. Weekly and daily indicators show fading downside momentum but still point to support around 5.25 and resistance near 5.35–5.36.
Short-term charts suggest consolidation rather than a fresh sell-off, leaving the real well-positioned as long as Brazil’s policymakers continue to prioritise credible budgets and a disciplined rate path over easy promises of stimulus.