Brazil's Ibovespa rises 6.9% and dollar falls 4.4% between election rounds

Brazil's Ibovespa stock index rose 6.9% between the first and second rounds of the 2026 presidential election, while the dollar fell 4.4% against the real, driven by falling long-term interest rates and strong foreign investment inflows. The index reached a record 206,911.89 points after the first round, with foreign capital inflows totaling R$20.15 billion in October. Goldman Sachs attributes 85% of the rally to the interest rate movement, while UBS sees potential for further gains. The dollar dropped from R$5.21 to R$4.98 during the period, with analysts projecting it could reach R$4.70. Market positioning suggests expectations of a victory for candidate Flávio Bolsonaro, seen as more favorable to fiscal adjustment.