Dollar jumps 12.52% to R$ 5.60 after Lula's re-election

The dollar surged 12.52% against the Brazilian real on Monday, October 26, 2026, reaching R$ 5.60 following Luiz Inácio Lula da Silva's re-election victory. The currency later retreated to R$ 5.454, still up 9.59% for the day. Lula defeated Flávio Bolsonaro in Sunday's runoff with 51.79% of votes versus 48.21%. Analysts said the spike reflected investor surprise, as polls had favored Bolsonaro, whose fiscal austerity stance had attracted market positioning. Uncertainty over Lula's economic policy fueled the selloff. Experts noted the reaction could shift based on government signals and fiscal credibility. Concerns center on potential high spending and inflation, though some cautioned against viewing the move as a definitive judgment on the new term.