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Reuters reports that Lula's election victory over Flavio Bolsonaro was set to trigger a sharp selloff in Brazilian markets. Morgan Stanley estimates a roughly 200bp repricing of fiscal risk and sees USD/BRL testing 5.50, with a bear case of 6.00 if spending cuts are not committed.
Analyst forecasts of a weaker real raise the dollar cost of Brazilian soybean and corn exports and of imported feed inputs. The scenarios also show how fiscal credibility could push the currency further.
investing.comInvesting.comOct 26, 2026After 301 past bullish macro events, Brazilian Real (BRL per USD) moved a median +0.4% over 5 sessions (57% higher; middle half -1.2% to +1.7%), and +1.0% over 20.
Moves of each commodity's benchmark from the last close before the event. Historical reads pool past events of the same kind; they describe what happened, not what will. Not investment advice.
Reuters analysts forecast a roughly 200bp fiscal-risk repricing and a USD/BRL selloff, explaining the sentiment and fiscal mechanism.
Analysts forecast a fiscal risk repricing of about 200bp and USD/BRL testing 5.50 or higher, which fits the depreciation mechanism.
