The dollar rose to R$5.19 against the real as global U.S. currency strength and rising oil prices fueled Federal Reserve rate hike expectations, while Brazil's stock market fell amid weakening risk appetite and domestic political uncertainty surrounding presidential elections.
The dollar surged to R$5.11 Wednesday amid global risk aversion, Middle East tensions raising oil prices over 3%, and technical profit-taking on Brazilian assets following recent electoral-driven gains.
Brazilian President Lula da Silva accused far-right candidate Flavio Bolsonaro of treason for requesting U.S. interference in elections, amid escalating U.S. tariffs on Brazilian exports and Trump's endorsement of Bolsonaro ahead of October elections.
The dollar rose strongly, with the real experiencing its worst week since November 2022, accumulating a 3.54% loss.
Eduardo Bolsonaro and businessman Paulo Figueiredo met with Trump's team in Washington requesting U.S. sanctions against three Brazilian Supreme Court justices, including reinstating penalties against Alexandre de Moraes under the Global Magnitsky Act.
A Brazilian bank liquidator expanded its search for assets belonging to former banker Daniel Vorcaro and associates across the United States, issuing subpoenas to Bradesco, multiple banks, and real estate companies to trace transactions exceeding $500 and recover funds allegedly diverted from the failed Master Bank.
Donald Trump met with Brazilian Senator Flavio Bolsonaro in May, praising President Lula da Silva during their three-hour discussion, while Bolsonaro sought declarations against Brazilian criminal organizations and positioned Brazil as alternative to China for rare minerals.
Creditors of Master's holding company in Cayman Islands demand $1 billion in debt repayment.
Flávio Bolsonaro visited Trump seeking terrorist designations for Brazilian criminal organizations, subsequently Trump imposed 25 percent tariffs on Brazil, disrupting exports of processed foods, textiles, and wood products, affecting the presidential election dynamics four months prior.
Argentina's government faces obstacles accessing international debt markets as rising U.S. Treasury yields increase borrowing costs for higher-risk countries, with Argentina's country risk at 524 basis points compared to regional peers' lower rates.