Between late June and early July 2025, the Brazilian real experienced notable fluctuations against the US dollar, influenced primarily by domestic fiscal policy decisions and international trade tensions. Initially, the real weakened, with the dollar rising to around R$5.54 to R$5.55 amid uncertainty over a proposed increase in the Tax on Financial Operations (IOF) and intervention by Brazil's Central Bank. However, following the rejection of the IOF hike and lower-than-expected inflation data, the real strengthened, with the dollar declining to R$5.49 and further to R$5.43 by the end of June, marking its lowest level since September 2024. Concurrently, the Ibovespa, Brazil's main stock index, rebounded from earlier declines, reaching new historical highs above 140,000 points by early July. This rally was supported by positive labor market data from Brazil and optimism in global markets. On July 2, the dollar fell to R$5.41, its lowest since August 2024, while the Ibovespa briefly dipped but soon resumed its upward trajectory. By July 3, the Ibovespa set a new record, closing at approximately 140,928 points, while the dollar hit its lowest value in over a year at R$5.40. However, this trend reversed in the following days due to renewed trade tensions. US President Donald Trump's administration announced a 50% tariff on Brazilian goods, leading to a sharp depreciation of the real. On July 7 and 9, the dollar surged back above R$5.50, reaching R$5.60 in futures markets, while the Ibovespa declined by more than 1%, reflecting investor concerns over the tariff impact. The real's decline was marked by a loss of over 2% against the dollar following the tariff announcement, underscoring the sensitivity of Brazil's currency and equity markets to international trade policies and domestic fiscal measures.