The Brazilian real strengthened to its strongest level in nearly two months on Thursday, closing at R$ 5.061 to the US dollar.
The currency gained ground as the greenback softened across global markets, driven by a broader reassessment of Federal Reserve policy expectations following softer-than-expected US inflation data.
Foreign capital inflows into Brazilian assets supported the real’s advance, with the local stock market also posting gains.
The move marks a notable reversal for the real, which had faced pressure in recent weeks amid global dollar strength.
The dollar’s decline reflects a shift in market sentiment regarding US monetary policy.
Traders have scaled back bets on near-term interest rate hikes by the Federal Reserve, reducing the yield advantage that had previously supported the greenback.