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By: Leonel Mattos, Market Intelligence Analyst • BRAZIL PRS
USDBRL and Dollar Index (points)
USDBRLvariations | Daily: +0.02% | Weekly: -0.24% | Monthly: -1.88% | Yearly: -7.45% | Over 12 months: -9.50%
Dollar Index variations | Daily: -0.03% | Weekly: -1.55% | Monthly: -1.29% | Yearly: +1.60% | Over 12 months: -0.17%
Brazil: Historical and expectations for interest rates – Focus bulletin of July 24, 2026
The foreign exchange market is expected to respond to the Central Bank’s Monetary Policy Committee (Copom) decision on Wednesday (05), which is expected to lower the basic interest rate (Selic) by 0.25 percentage points, from 14.25% to 14.00% per year.
Why this matters: A rate cut by the Central Bank reduces the yield of domestic public bonds and hampers the attraction of foreign capital, weakening the BRL.
Inflation data: The latest inflation data came from the July Extended National Consumer Price Index 15 (IPCA-15), which showed inflation at 0.06%, compared to expectations of 0.19%.
Resilient labor market: In the labor market, the unemployment rate fell from 5.6% in May to 5.4% in June, close to the historic low of 5.1% recorded in December 2025.
External uncertainties: At the moment, the external scenario remains a significant risk factor for domestic monetary policy.
US: Historical and expectations for interest rates – updated July 31, 2026
The foreign exchange market is expected to respond to the release of US economic indicators, particularly concerning the labor market.
Why this matters: A reacceleration in job creation in the US could increase bets for a short-term Federal Reserve rate hike, favoring capital inflows into the country and strengthening the USD globally.
Estimates: The median projections suggest net job creation should increase from 57,000 in June to 80,000 in July.
Rate hikes in doubt: June’s data surprised investors with a slowdown, suggesting the US economy might not be as overheated and reducing urgency for Federal Reserve rate hikes.
Fed’s credibility questioned: Last week, rate hike bets in the short term dropped significantly after the Federal Reserve’s decision caused unease among market operators.
Overview: During the press conference, Warsh maintained his firm anti-inflation stance, well-received in June’s decision, but repeatedly refused to commit to an action plan to stabilize prices.
Potential dissent: Besides being the Federal Reserve president, Kevin Warsh is the FOMC president, comprising 19 members (only 12 vote annually in a rotation system).
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