The US dollar opened lower against the Brazilian real on Wednesday after Democrats won majorities in both chambers of Congress, in a setback for President Donald Trump. At 9:48 a.m., the dollar was down 0.20% at R$5.475. The previous day, it had risen 0.70% to R$5.486, its highest closing level since December 2025.
The move tracked a broader weakening of the US currency: at the same time, the DXY index, which measures the dollar against a basket of six major currencies, was down 0.54%.
Brazilian interest-rate futures were near stability at shorter maturities and slightly lower at longer ones, as investors awaited the Monetary Policy Committee’s (Copom) decision. The prevailing market expectation was that the Selic would remain at 13.75% a year. Copom’s announcement was due after 6 p.m.
A BTG Pactual survey of 54 financial-market participants found that 77.8% expected the central bank to hold rates in November, and 81.5% considered that the most prudent course. A Bloomberg survey of 31 economists also pointed to a hold, although five respondents saw the possibility of a cut to 13.50%.
Domestic markets remained under pressure from worsening inflation expectations. In the first Focus survey released after President Luiz Inácio Lula da Silva’s re-election, economists raised their forecasts for 2026 inflation and the year-end Selic rate. Their estimate for 2027 inflation also increased, to 4.76%, above the top of the target range.
Otávio Araújo, senior consultant at ZERO Markets Brasil, said the Ibovespa was also likely to open under pressure after falling for six consecutive sessions. The index was about 20.8% below its October peak, amid increased investor risk aversion. He said the prospect of a pause in monetary easing, alongside higher inflation forecasts, rising futures rates and a weaker real, had reduced the room for further rate cuts without increasing concerns about fiscal risk and monetary-policy credibility.
The previous session saw the Ibovespa fall 1.42% to 165,528 points, its lowest close since January. The decline followed market discussion of a proposal by economist André Lara Resende to reduce the Selic through a new framework linking fiscal and monetary policy. The proposal and speculation about possible changes to economic policy contributed to concerns among analysts and investors.
In international markets, US Treasury yields were lower. The 10-year note yield stood at 4.927%, down 0.71%, while the 30-year yield was 5.301%, down 0.46%. Brent crude fell 1.41% to US$102 a barrel at 9:54 a.m.
Sources: Folha Mercado.