Dollar rises 10% after election; banks see an overreaction and Congress as a counterweight

The US dollar gained 10.33% against Brazil’s real between the last trading session before the presidential runoff and November 7, with a rise of more than 9% in the first week after Lula’s reelection. International bank strategists described the real’s decline as excessive and said fiscal adjustment and a conservative-leaning Congress could constrain expansionary policy; Commerzbank projected the dollar at R$5.20.