Monthly FX Bulletin – May 2025

May 26, 2025 edition of the TCP / VNCFX FX bulletin, covering April. Easing US-China trade tensions favored emerging markets, and the real was up 10.4% for the year. In Brazil, the Selic rose to 14.75%, the highest since 2006, with signs that the cycle was ending; inflation stood at 5.53% over 12 months; and Lula's pre-election measures revived fiscal fears. The bulletin also mentions the liquidity support for Banco Master. It sees room for the dollar to fall to R$5.50 but considers the real's rally fragile and advocates FX hedging for exporters and importers.