"The Brazilian real is poised to grow, as the currency's value has been consistently rising since 2025. Two key drivers will benefit the Brazilian real: the end of the Middle East conflict and the rising uncertainty in the Strait of Hormuz. Driven by US-Iran tensions, Robin Brooks notes the undervalued Brazilian real will next surge past 4.5. As Hormuz Strait unrest boosts Brazil's exports, the market may next see a 20% real rally mirroring 2022."
"Robin Brooks predicts that the real has a lot further to go, and will overcome the 4.5 real per dollar exchange rate, which he considers the currency's fair value exchange rate. Brooks states that the Brazilian real is horribly beaten down and undervalued and is poised to benefit from geopolitical drivers similar to those experienced when Russia invaded Ukraine. At the time, the Brent oil benchmark scaled 40%, and the Brazilian real rose 20% too."
"The Brazilian real has become a true outlier since hostilities in the Middle East began, becoming the best-performing currency in emerging markets, besides the Hungarian forint. Nonetheless, even with its recent rise, analysts believe that the real rally still has legs and that a so-called perfect storm to prop up the currency's value is brewing. Upcoming elections between Lula da Silva and Flavio Bolsonaro may disrupt the real's run to 4.5."
The Brazilian real has strengthened consistently since 2025 and has become a top-performing emerging-market currency. A forecast points to further gains beyond 4.5 reais per US dollar, supported by geopolitical conditions. Easing conflict in the Middle East would improve sentiment toward carry currencies such as the real. Increased uncertainty in the Strait of Hormuz is expected to boost Brazil’s export outlook, reinforcing demand for the currency. The real’s rally is also linked to historical parallels with the period after Russia’s invasion of Ukraine, when oil prices rose sharply and the real gained. Upcoming elections between Lula da Silva and Flavio Bolsonaro could introduce volatility and disrupt the path to 4.5.
Read at news.bitcoin.com
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