By: Leonel Mattos, Market Intelligence Analyst • BRAZIL PRS
USD and Dollar Index (points)
USDBRL Variations | Daily: +1.58% | Weekly: +3.53% | Monthly: +2.29% | Yearly: -7.47% | Over 12 Months: -10.78%
Dollar Index Variations | Daily: +0.42% | Weekly: +1.44% | Monthly: +1.27% | Yearly: +0.99% | Over 12 Months: -1.51%
US: Interest Rate History and Forecast – Updated May 15, 2026
In a week with few major indicators, investors are expected to focus on the release of the minutes from the Federal Reserve’s Federal Open Market Committee (FOMC) meeting amid concerns over inflationary trends in the US.
Why This Matters: Persistently high inflation in the US leads to expectations of prolonged higher interest rates, which favor Treasury yields and attract foreign capital, thereby strengthening the dollar globally.
Inflation Risks: Last week, US economic indicators revealed stronger and more widespread inflationary pressures.
No Room for Rate Cuts: Amid this inflationary challenge, investors have reversed their expectations regarding the Federal Reserve’s next interest rate move, shifting from anticipating a cut to forecasting a hike.
Warsh’s Challenge: Notably, the US Senate has approved Kevin Warsh’s nomination as the next Federal Reserve Chair, effective Monday (18).
Monthly Volatility of the Exchange Rate (USDBRL) During Presidential Election Years
Investors remain focused on news surrounding Brazil’s October 2026 presidential elections after the real saw significant depreciation last week due to fiscal concerns.
Why This Matters: Investors are increasingly sensitive to election-related developments, reacting strongly to news about the upcoming vote.
Fiscal Concerns: In recent months, investors have reacted negatively to election-related developments, such as the announcement of pre-candidates Luiz Inácio Lula da Silva and Flávio Bolsonaro.
Ship Movements in the Strait of Hormuz (Seven-Day Moving Average)
Investors are also closely monitoring the prolonged navigation blockade in the Strait of Hormuz and the lack of short-term diplomatic solutions between the US and Iran.
Why This Matters: A deterioration in the fragile US-Iran relationship tends to increase investor risk aversion, negatively impacting risky assets like the real.
US-China Meeting: Expectations for the meeting between the leaders of the world’s largest economies included discussions about resolving the Middle East situation.
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