Recent Brazilian presidential election results have emerged as the dominant driver of USD/BRL pricing, with Flávio Bolsonaro’s stronger-than-expected first-round performance prompting a sharp real rally that pushed the pair below 5.00 in early October. Markets are pricing in potential fiscal consolidation under a Bolsonaro victory in the October 25 runoff, including spending cuts near 2% of GDP that could support further BRL appreciation and allow Selic cuts. Hawkish Federal Reserve policy, with the funds rate at 3.75–4.00% and additional tightening signaled, continues to bolster the dollar globally while Brazil’s elevated real rates maintain a positive carry differential. Traders are monitoring upcoming U.S. inflation data and the Copom’s policy path for shifts in rate differentials that could influence whether the pair tests recent lows near 4.90 or rebounds toward 5.20 by year-end.