Dollar Surges Past R$5.80 Amid Employment Data and Global Trade Tensions

The Brazilian real weakened against the dollar on February 26, 2025, as the USD/BRL exchange rate climbed to R$5.803, marking a 0.83% increase.

This was the highest level since early February, driven by strong domestic employment data and escalating global trade uncertainties. The day began with the real strengthening slightly, pushing the dollar down to R$5.74 by mid-morning.

However, the release of Brazil’s January employment figures reversed this trend. The CAGED report revealed 137,303 new formal jobs, far exceeding market expectations of 51,508 positions.

While the data underscored economic recovery, it also fueled speculation about further interest rate hikes by Brazil’s Central Bank to combat inflation. Higher rates often attract foreign capital but can weigh on riskier assets like equities.

Global developments compounded pressure on the real. Former U.S. President Donald Trump announced potential 25% tariffs on European goods while delaying tariffs on Mexico and Canada until April.

These announcements heightened market uncertainty, strengthening the dollar as investors sought safe-haven assets. Brazil’s stock market mirrored this tension.

Key Market Insights

The Ibovespa index fell 0.96%, closing at 124,769 points amid falling commodity prices and weaker U.S. markets. Domestically, concerns over higher interest rates also contributed to equity outflows as investors shifted to fixed-income assets.

Overnight, markets stabilized slightly as traders reassessed Trump’s tariff threats as negotiation tactics rather than immediate disruptions. The USD/BRL pair held above its 50-day moving average of R$5.78, signaling continued upward momentum despite oversold technical indicators like an RSI of 34.85.

Market makers noted robust trading volumes in USD/BRL as institutional investors adjusted positions following the employment data and geopolitical developments. Emerging market ETFs recorded net outflows, reflecting risk aversion among global investors.

Looking ahead, analysts expect USD/BRL to trade between R$5.75 and R$5.82 today, with domestic monetary policy and global trade tensions likely dictating movements. While strong job creation highlights Brazil’s economic resilience, external risks and inflation concerns keep the real under pressure against the dollar.

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