Brazil, South Africa FX Soars as Trump Dials Back Trade War Tone

Group 1 - Currencies from Brazil, South Africa, and Mexico outperformed other emerging-market currencies as trade concerns eased, with thin trading volumes due to the US bond market being closed for a holiday [1] - Investor appetite for riskier assets increased, with the Brazilian real and South African rand each climbing 1.3%, supported by higher commodity prices and indications of potential trade negotiations between the US and China [2][3] - The Chilean peso and Peruvian sol also performed well as copper prices rose, with China's imports of copper and iron ore reaching their highest levels this year in September [4] Group 2 - Despite a rebound in the Brazilian real after a nearly 3% selloff, it is expected to remain under pressure due to fiscal concerns related to government efforts to expand social benefits ahead of 2026 [5] - Currencies from Eastern Europe faced pressure, influenced by the common currency and political instability in France, while the Israeli shekel lagged due to expectations of a peace deal with Hamas [6]