The Brazilian real strengthened against the US dollar in the second half of June and early July 2025, with the dollar falling to its lowest level since August 2024, reaching around R$5.40 to R$5.43. This decline reflected a 12.07% drop in the dollar's value against the real since the start of the year and a 5.01% decrease in July alone. However, the trend reversed in early July following US President Donald Trump's announcement of new tariffs, including a 50% duty on Brazilian products. This announcement caused the dollar to surge to R$5.54 and above, while Brazil's main stock index, the Ibovespa, declined by up to 3.64% over the week after the tariff imposition. The market remained volatile with fluctuations in the dollar exchange rate between R$5.40 and R$5.60, influenced by ongoing trade tensions, inflation data from the US, and China's GDP figures. Additionally, the reinstatement of the IOF tax and decisions by Brazil's Supreme Federal Court (STF) regarding the IOF added to market uncertainty. By mid-July, the dollar hovered around R$5.55 to R$5.58, with the Ibovespa showing mixed performance but generally trending lower amid concerns over the tariff dispute and broader economic indicators.