Brazil’s fiscal outlook and October 2026 general elections represent the dominant near-term driver of USD/BRL pricing, as persistent primary deficits and public debt above 80% of GDP have elevated the domestic risk premium and weighed on the real despite its recent appreciation to roughly 5.12. The Central Bank of Brazil has cut the Selic rate four times to 14.00%, narrowing the interest-rate differential with the United States while inflation eased to 4.22% year-over-year in August, supporting expectations for another 25-basis-point reduction at the September 16 Copom meeting. Commodity support from Brazil’s net-oil-exporter status and resilient terms of trade have provided a partial offset, yet consensus forecasts point to USD/BRL moving toward 5.20–5.35 by year-end amid narrowing carry and pre-election volatility. Traders are monitoring labor-market data, fiscal releases, and global risk sentiment for signals on whether the real can sustain levels below 5.15 or retest higher ranges seen earlier in 2026.