Robin Brooks, Senior Fellow at The Brookings Institution and former Chief FX Strategist at Goldman Sachs, believes the Brazilian Real is poised to grow, as the currency’s value has been consistently rising since 2025. Two key drivers will benefit the Brazilian real: the end of the Middle East conflict and the rising uncertainty in the Strait of Hormuz.
The Brazilian real has become a true outlier since hostilities in the Middle East began, becoming the best-performing currency in emerging markets, besides the Hungarian forint.
Nonetheless, even with its recent rise, analysts believe that the real rally still has legs and that a so-called perfect storm to prop up the currency’s value is brewing.
Robin Brooks, Senior Fellow at The Brookings Institution and former Chief FX Strategist at Goldman Sachs, predicts that the real “has a lot further to go,” and will overcome the 4.5 real per dollar exchange rate, which he considers the currency’s “fair value” exchange rate
Brooks states that the Brazilian real is “horribly beaten down and undervalued” and is poised to benefit from geopolitical drivers similar to those experienced when Russia invaded Ukraine. At the time, the Brent oil benchmark scaled 40%, and the Brazilian real rose 20% too.
