The Brazilian real strengthened to around 4.95 per USD, recovering from a three-month low, following inflation data that was higher than expected for January, at 4.51%, still slightly above the central bank’s tolerance for 2024. Meanwhile, limited FX inflow, a lower-than-expected trade surplus in January, and reduced FDI in December pose challenges. Additionally, China’s ongoing deflation and reduced consumer prices may affect demand for Brazilian exports, impacting key sectors such as iron ore, oil, and soybeans.