Brazil Markets · Real · Goldman Sachs
Published Monday, 26 October, 11:30 a.m. ET · Source: Goldman Sachs research note, B3 exchange data
Key Facts
—The call. Goldman Sachs says the dollar could rise about 12% against Brazil’s real, to near 5.60 reais per dollar (R$5.60).
—The move. The dollar closed Friday just under R$5, hit about R$5.60 on Monday and was near R$5.47 by 10:45 a.m. ET.
—The range. Goldman’s two reference cases are R$5.40 for a milder fiscal scare and R$5.80 for a worse one.
—Still unknown. Who Lula picks to run the economy, and what his government says about spending.
—Power Index Brazil ranks 1st of 14 in The Rio Times Latin America Power Index, with 75.0 points (October 2026 edition).
Brazil Election Data Room
Runoff poll average: Flávio Bolsonaro 51.0%, Lula 49.0%
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Prediction markets · who wins the runoff
Implied chance of winning Brazil’s presidency on 25 October, from traders’ prices.
Polymarket
Flávio Bolsonaro – · Lula – (US$249 million traded)
Kalshi (regulated in the US by the CFTC)
Flávio Bolsonaro 0.4% · Lula 99.6%
As of 25 October, 11:40 pm ET (03:40 Lisbon), updated every 20 minutes. Prices are bets, not polls, and can move fast.
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Brazil’s currency took a hard punch on Monday morning, and Goldman Sachs has now put a number on how far it could go. The US investment bank said in a note that the dollar could rise about 12% against the real and approach R$5.60 after President Luiz Inácio Lula da Silva won re-election on Sunday.
The dollar closed Friday just under R$5, according to market data, and touched about R$5.60 in early trading. For Americans holding Brazilian assets, that is a jolt to the dollar price of the real, which sets what their investments are worth, and it comes as Brazil’s economy faces a new political chapter.
What Goldman Actually Said
Goldman’s argument starts with futures, contracts that let traders bet on where a currency will trade later. Futures on the real, traded on the Chicago Mercantile Exchange (CME), already pointed to a strong repricing, the bank said.
A rise of 12% would be far larger than the moves that followed recent presidential elections in Brazil. Goldman ties it to two things: the surprise of the result, and a belief that Lula’s government will run bigger deficits.
That belief raises what bankers call a fiscal premium, the extra return investors demand to hold a country’s assets when its public finances look shakier. Goldman says a dollar near R$5.40 would fit a premium similar to the one markets priced in September 2024.
A dollar near R$5.80 would signal higher perceived risk. The R$5.60 level suggested by futures sits between the two.
In Plain English
The real is Brazil’s currency. When the dollar buys more reais, the real is weaker.
Fiscal premium is the extra reward investors want for lending to a government they worry about.
Circuit breaker is an automatic pause that stops trading after a very steep fall.
Why Markets Were Caught Off Guard
The result went against what most of the financial market had expected, as many investors had backed conservative Flávio Bolsonaro, the senator Lula faced in the runoff. Stocks showed it within minutes of the opening bell.
The Ibovespa, Brazil’s main stock index, fell 10% within minutes, which forced B3, the São Paulo exchange, to halt trading for 30 minutes at 8:57 a.m. ET. It was the first such stop since the Covid crash of 2020, and the index later slid as much as 17%, as our earlier report on the halt describes.
The currency moved with it, as our first report on the real’s fall showed. By 10:45 a.m. ET the dollar had eased back to about R$5.47, still roughly 9.5% above Friday.
What It Means for US Readers
A dollar that rises 12% means each real buys about 11% fewer dollars. US-listed shares of Brazilian companies, known as ADRs, and funds such as the iShares MSCI Brazil ETF (EWZ), are priced in dollars, so currency losses add to any fall in the stocks themselves.
Travellers get the opposite effect. A R$100 dinner cost about US$20 on Friday’s rate, and would cost about US$18 at R$5.60 (RT market data).
What Is Not Known Yet
Goldman says the first reaction does not set the whole path, which will depend on signals from the government. The picks for Lula’s economic team and the first fiscal announcements will matter most.
The bank points to past elections, including 2002, as examples of how an early market reaction can change as a government’s policy signals emerge. Whether the real settles near R$5.40, R$5.60 or R$5.80 is a question for the coming weeks, and our Ibovespa guide tracks the stock side of it.
Sources
Goldman Sachs research note, 26 October 2026 · B3, Brazil’s stock exchange · CME Group futures · Superior Electoral Court (TSE) · RT market data
This article was produced by The Rio Times’ automated newsroom system. How we use AI · Report an error · Editorial responsibility: Matthias Camenzind, Editor-in-Chief
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Frequently Asked Questions
How far could the dollar rise against the real, according to Goldman Sachs?
Goldman says the dollar could rise about 12% and approach R$5.60 after Lula’s re-election. It sees R$5.40 and R$5.80 as reference cases for lower and higher fiscal risk.
What does a weaker real mean for travellers to Brazil?
Dollars stretch further. A R$100 meal costs about US$18 at R$5.60, against about US$20 on Friday.