Dollar plunges after Trump's tariff package and closes at its lowest rate since October.
The spot dollar closed down 1,18%, at R$5,6290.
By Fabricio de Castro
SAO PAULO (Reuters) - The dollar closed Thursday sharply lower against the real, more than 1%, at its lowest level in 2025, following the general decline of the US currency abroad, after import tariffs announced by the Trump administration the previous day raised fears of a recession in the US.
The spot dollar closed down 1,18%, at R$5,6290 -- the lowest closing price since October 16 of last year, when it closed at R$5,6226. Year-to-date, the currency has fallen 8,90% against the real.
At 17:32 PM on the B3 exchange, the dollar for April – currently the most liquid in Brazil – was down 1,08%, at R$5,6580.
Thursday was marked by strong aversion to the dollar – both in relation to other strong currencies, such as the yen and the euro, and in relation to the currencies of commodity-exporting and emerging countries, such as the real, the Mexican peso, and the Chilean peso.
Behind the movement was the perception that the reciprocal tariffs announced the previous day by US President Donald Trump would be detrimental to the US economy itself, which could even enter a recession. Such a scenario would open the door for the Federal Reserve to cut interest rates further in the US, which ultimately would weigh on the exchange rate of the US dollar.
Late Wednesday afternoon, Trump announced a basic tariff of 10% to be applied to all US imports, in addition to higher rates for some of the country's main trading partners. The rate for Brazil is 10%, while China will face 34%, South Korea 25%, Japan 24%, and the European Union 20%, among others.
“Trump released the tariff increase yesterday after 17 pm, and the market was almost completely closing. Today (Thursday) we started with the dollar losing value against other currencies, so obviously it also lost value in relation to the real,” said João Oliveira, head of the Trading Desk at Banco Moneycorp.
In the market, there is also the assessment that Brazil may even benefit from the tariff war, potentially selling more to economies such as China and the European Union. Soybeans, one of Brazil's main export products, saw its premiums soar at Brazilian ports on Thursday, as reported by Reuters.
During an event this Thursday, the president of the asset management firm Verde Asset, Luis Stuhlberger, assessed that Trump's tariff package was indeed positive for the country.
"Brazil benefited greatly from this situation," he said. "It remains to be seen whether Brazil will know how to take advantage of this opportunity," added the manager of Verde, which has R$17 billion in assets under management.
In this environment, the US dollar remained firmly lower against the Brazilian real throughout the session. After reaching a high of R$5,6462 (-0,88%) at 9:13 am, shortly after the opening, the dollar plummeted to a low of R$5,5939 (-1,80%) at 11:43 am.
“Concerns about the recession in the US led investors to seek more attractive assets. This flow ended up strengthening the real and other currencies of emerging countries,” commented Cristiane Quartaroli, chief economist at Ouribank.
"Although I believe that fiscal uncertainties still somewhat limit this decline we are seeing today, if we consider a more medium- and long-term behavior for the dollar," he added.
Abroad, at 17:30 PM, the dollar index -- which measures the performance of the US currency against a basket of six strong currencies -- was down 1,05%, at 102,080.
In the morning, the Central Bank sold the entire offering of 20.000 traditional currency swap contracts for the purpose of rolling over the maturity of May 2, 2025.
(Edited by Alexandre Caverni)
