Dollar Trades Near R$ 5.50 After US Jobs Data
US job growth beats expectations, fueling rate hike bets and putting pressure on global currencies
The commercial dollar remains steady around R$ 5.50 during Friday's trading session. The US currency showed volatility following the release of the American employment report. The country added 165,000 jobs in October, surpassing the forecast of 59,000 positions.
The surprising result in the American labor market increased the likelihood of a Federal Reserve interest rate hike in December. The probability of monetary tightening rose from 67% to 77% according to the CME Group. The 2-year T-note yield climbed to 4.534% and the DXY index reached higher levels.
Domestically, the lack of clarity regarding public spending adjustments keeps the market on edge. XP Investimentos revised its exchange rate projections, raising the estimate to R$ 5.30 in 2026 and R$ 5.50 in 2027. Risk metrics in Brazil are nearing levels seen during periods of fiscal stress.
Brazil's CDS is close to the level recorded at the end of 2024. The debate over fiscal dominance continues to influence investor perception of national assets. Exchange rate behavior reflects the combination of external dollar strength and caution regarding the Brazilian fiscal outlook.
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