Brazil inflation eased in June as the IPCA-15 rose less than forecast, pushing markets to bet on an August Selic cut despite a costly power bill.

Brazil pulled a bond auction and intervened in the currency market to calm investors rattled by a central bank that cut rates while warning on inflation.

Dollar pushes to 5.20 reais, its strongest since March, as global investors flee to safety before a pivotal US inflation reading and Brazil's own mid-month price data.