Brazilian Real Jumps 5% as Bolsonaro Leads First Round of Election

Brazil’s real surged 5% against the US dollar and stocks climbed 8% after Flavio Bolsonaro took the lead in the first round of the election.

The rally reflected investor bets that the election could pave the way for lower government spending and a reduction in the budget deficit.

Those expectations also supported hopes for greater room to cut interest rates, adding momentum to the rise in Brazilian assets.

The gains signaled a positive initial market response to Bolsonaro’s lead, with attention focused on the prospect of fiscal restraint rather than any confirmed policy changes.