Brazil’s exchange rate to the dollar has dropped to near record lows, heaping further pressure on the leftwing government to introduce spending cuts quickly and calm mounting investor concerns over its commitment to fiscal discipline.

After weeks of the currency declining, president Luiz Inácio Lula da Silva’s administration on Monday confirmed it would soon unveil long-anticipated measures to curb expenditure.

The government’s decision to accelerate the announcement is viewed in part as a reaction to a sharp fall in the real, which has been under strain as fund managers fret over the management of the public finances of Latin America’s largest economy.

The currency is down a almost a fifth against the dollar and is the third worst-performing major currency on a total return basis. It skirted close to a record low on Wednesday as the greenback surged following the election of Donald Trump.

A 2.6 per cent fall took the real to 5.89 to the dollar, close to the psychologically-important level of six, according to Bloomberg data, before recovering its losses.

“Investors, market agents and companies are worried because the government has not shown it is really committed to achieving fiscal sustainability,” said Luiz Figueiredo, chair of Jive Investments in São Paulo and a former central bank director.

“They’re taking it more seriously, no doubt. But I’m a little sceptical as to whether it will calm the crowd down,” he added.

The real has suffered from a sustained dollar rally, similar to other “carry trade” currencies like the Mexican peso. But asset managers say the Brazilian currency has also been hit by fears that a loose fiscal policy under the Lula administration will feed inflation, and force the central bank to keep interest rates higher for longer.

Swaps markets are pricing rates for the South American nation to reach more than 13.5 per cent by the middle of next year, a sharp contrast to the current basic lending benchmark of 10.75 per cent. In parallel, Brazilian stocks have fallen nearly 5 per cent since late August.

With addressing the issue now the main domestic priority, finance minister Fernando Haddad cancelled a trip to Europe this week at Lula’s request to focus on the cost reduction proposals.

Thierry Larose, emerging markets bonds portfolio manager at Swiss bank Vontobel, said a savings figure in the middle of a R$30bn-R$50bn range suggested by local media would be well-received by markets.

“The US dollar getting close to six against the real and all-time highs has been instrumental in why the government is now changing its attitude, promising finally to cut expenditure,” he added. “The sell-off has been overextended so it wouldn’t need much to have a rebound in Brazilian assets in general.”

Stock markets bounced on Monday when Haddad said the measures would be presented this week. The Bovespa equities index registered its strongest one-day rise since February, paring losses to 3.5 per cent so far in 2024, but the real’s losses resumed after the US election result.

Haddad on Wednesday said discussions with cabinet colleagues over the proposals had concluded yesterday and that Lula would in turn send the matter to Congress.

“The ministers are all very aware of the task we have ahead to reinforce the fiscal framework and the predictability and sustainability of the finances in the medium and long term,” he told reporters.

Mainstream economists warn that Brazil’s gross government debt, which at 78.5 per cent of GDP is relatively elevated for an emerging country, risks reaching unsustainable levels without more significant fiscal adjustments.

Lula has pursued a tax-and-spend approach in his third non-consecutive term as president, boosting welfare payments to the poorest and help for homebuyers and debtors. 

The veteran leftist’s ministers had already pledged to eliminate the budget deficit before interest payments in 2024 and generate surpluses thereafter, but until now this has been primarily premised on higher tax revenues. 

The IMF recently upgraded Brazil’s growth forecast to 3 per cent and unemployment is near a record low. Yet investor calls for spending restraint have mounted as inflation runs close to the official target’s cap of 4.5 per cent, leading the central bank to raise interest rates. 

Under consideration are cuts to obligatory expenses such as pensions and social benefits, which are mandated by the constitution and consume 90 per cent of Brazil’s budget. Ministers aim to ensure compliance with a “fiscal framework”, introduced by the Lula administration last year, which limits spending growth to 2.5 per cent.

Alberto Ramos, chief Latin America economist at Goldman Sachs, said the measures were unlikely to reduce overall government expenditure, given that the fiscal rules also stipulate the budget grows in real terms annually.

“The fiscal targets are way too lax and leading to a significant increase in public debt. The central bank is hiking again because the economy is overheating. The main reason is excessive fiscal activism,” he said.

The spending worries reflect pressures on governments across the region, including Mexico and Colombia, said Eirini Tsekeridou, fixed-income analyst at Julius Baer. 

“Fiscal discipline will remain an important topic for Latin America in 2025, as consolidation efforts are challenged by . . . both high interest rates [and] also high public debt levels,” Tsekeridou said.

Additional reporting by Beatriz Langella

Donald Trump has defeated Kamala Harris in the US presidential election, sealing an improbable comeback that is expected to pitch American democracy, US alliances and global markets into an era of upheaval.

Trump’s resounding victory ends a volatile White House race that saw the billionaire Republican face two assassination attempts, a criminal conviction and the eleventh-hour change of his Democratic opponent after President Joe Biden abandoned his re-election bid.

The president-elect gained ground on the Democrats in 48 of the 50 states in the union, sweeping past Harris in the “blue wall” of Midwestern states she had thought could deliver her the White House. He was also on track to win the popular vote — something no Republican has done since George W Bush in 2004.

Victory in the state of Wisconsin gave Trump the majority in the electoral college he required to return to the presidency, according to the Associated Press.

“America has given us an unprecedented and powerful mandate,” Trump said in a victory speech in his Mar-a-Lago resort, predicting a “golden age” for the US under his new administration.

Republicans also took control of the US Senate and looked set to retain a majority in the House of Representatives, with nearly 60 races in the lower chamber yet to be called. Control of the US Congress would give Trump greater freedom to pursue a radical rightwing agenda in the world’s largest economy.

In one of the earliest foreign reactions, Israeli Prime Minister Benjamin Netanyahu hailed what he described as “history’s greatest comeback” and a “huge victory” for Trump in a post on X.

The two spoke later on Wednesday, and agreed “to work together for Israel’s security . . . [and] also discussed the Iranian threat”, according to the Israeli prime minister’s office.

As investors bet that Trump’s policies would boost both economic growth and inflation, the dollar rose 1.7 per cent against a basket of rivals in its biggest surge since the 2016 Brexit referendum.

Wall Street stocks hit a record high, with the S&P 500 index climbing 2.1 per cent and the Nasdaq Composite up 2.3 per cent.

At 78, Trump will in January be the oldest US president to be sworn into office. His running mate, 40-year-old Ohio senator JD Vance, will be one of the country’s youngest ever vice-presidents.

Trump will return to the White House four years after his first tumultuous term ended with his attempt to overturn the results of an election he lost to Biden and the assault on the US Capitol by his supporters.

He will lead a sharply divided country, but voters showed they were willing to overlook his past behaviour and incendiary campaign, instead punishing Harris for the high inflation, global conflicts and a significant rise in immigration that Republicans blamed on Biden’s policies. 

The Democratic president, who entered office promising to “restore the soul” of a divided nation, ends his term deeply unpopular, and will hand leadership of the country to a man he repeatedly claimed posed a grave threat to its democracy.

Mike Johnson, the Republican Speaker of the House of Representatives, hailed Trump’s victory, saying the party was “ready and prepared to immediately act on Donald Trump’s America First agenda”.

Trump, the world’s pre-eminent populist politician, now returns to the pinnacle of global power and is expected to proceed with big policy shifts that will reverberate domestically and internationally. 

At home, he has vowed to enact sweeping tax cuts for individuals and companies, start mass detentions and deportations of undocumented immigrants and punish his many political opponents.

Senior officials from Trump’s first administration have repeatedly warned of his authoritarian tendencies and erratic leadership, with John Kelly, his former chief of staff at the White House, saying he met the “general definition of fascist”.

Abroad, the US’s trading partners and allies can expect Trump to impose steep tariffs on a much broader scale than in his first term, which could shock the global economy and strain ties with allied governments in Europe, Asia and Latin America.

France’s President Emmanuel Macron posted that he was “ready to work” with Trump, while UK Prime Minister Sir Keir Starmer congratulated the president-elect on his “historic victory”.

In the Middle East, Trump has promised to take a tougher stance towards Iran than Biden and resolve the wars in Gaza and Lebanon, although he has not detailed how.

Trump is expected to put heavy pressure on Ukraine to reach a settlement with Russia over Moscow’s invasion of the country.

Ukraine’s President Volodymyr Zelenskyy sent his congratulations to Trump on Wednesday morning, posting on X that the president-elect’s “‘peace through strength’ approach in global affairs [is] exactly the principle that can practically bring just peace in Ukraine closer”.

Trump’s return to the White House eight years after his shock victory over Hillary Clinton could also serve as a personal legal victory for the former president, who was facing possible prison time stemming from four separate criminal cases. 

Earlier this year, Trump became the first former US president to be convicted of a crime when a New York jury found him guilty of almost three dozen charges in a “hush money” case involving payments made to a porn actor.

Trump also faces charges in two separate federal cases involving his handling of classified documents and his effort to overturn the 2020 election. As president, Trump will be able to lean on the Department of Justice to drop the federal cases.

Compared with his first term in office, Trump will be in a position to govern with a far more compliant Republican party on Capitol Hill. Many of his internal sceptics representing the traditional Republican establishment have either lost their re-election bids or embraced his leadership of the party.

Additional reporting by Tommy Stubbington

Adviser Services Holdings (ASHL) has sold its national advice business – LYNC Wealth Management – to Seven Investment Management (7IM).

ASHL operates both an independent and restricted advice network, Sense and Lyncombe, with a combined £9bn of assets under advice and over 450 advisers.

In 2023, ASHL began acquiring financial advice firms under the LYNC Wealth Management umbrella, with the aim of offering an exit for advisers wishing to sell their business.

LYNC has bought seven nationwide firms that collectively manage £500m of assets under advice, with plans to acquire several more firms in the coming months.

LYNC will become an appointed representative of the ASHL-owned Lyncombe network.

Additionally, LYNC will not be changing its leadership team “ensuring stability for all clients and stakeholders”.

ASHL said this transaction allows its focus to remain “firmly on its core mission, supporting the advice firms within its networks”.

ASHL chief executive Michael Couzens said: “This transaction marks a significant milestone for ASHL, enabling us to build on our success in supporting financial advisory businesses across the UK, which has served us so well since our earliest days.

“With the financial backing of the wider 7IM group, LYNC Wealth Management is poised for further growth through acquisitions and partnerships with financial advisory firms across the UK. We are excited for the future and look forward to ASHL’s continued partnership with LYNC Wealth Management as it enters this new phase.”

The transaction is subject to regulatory notifications and approval.

Earlier in November, 7IM acquired Rockhold Asset Management to expand its investment proposition.

The acquisition, which is also subject to regulatory approval, will take 7IM’s assets under management to around £27bn.

Rockhold Asset Management was launched in 2022 by the ASHL Group and now manages around £2bn of clients’ assets.

A CITY not far from the UK has been named a top destination to visit in 2025 – and there are big plans there for tourists.

Cork made the top 25 destinations named by National Geographic as places to visit next year.

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The Irish city is easy to get to – flights from the UK take just over an hour from both London and regional airports such as Manchester, Birmingham and Bristol.

It was also once the the home city of actor Cillian Murphy, Jonathon Rhys Meyers and Graham Norton.

And the city has revealed its huge five-year tourist plan to encourage more people to visit.

One of those is a new Cork lido, with the 50m heated outdoor swimming pool currently in plans.

Blarney Castle’s gardens will be revamped, with hopes to reopen the 600-year-old Barryscourt Castle to the public.

Roches Point Lighthouse also want reopen, while accommodation could open at Ballycotton Lighthouse.

Spike Island – dubbed Ireland‘s Alcatraz – could get more ferry routes,

Coastal pathways, a visitor attraction at Pairc Ui Chaoimh, festivals and and outdoor spaces at the Docklands are also included in the plans.

More hotels, cultural areas and food experiences to make it the country’s food capital have also been mentioned.

Aileen Murray and Derry Cronin, Cork City, Harbour and East Cork DEDP co-chairs said:”This plan sets out the actions, priorities and future investment for the area, by focusing on increasing the value of tourism, growing the appeal of the destination and increasing visitor spend.

“The actions within this plan will ultimately strengthen the local communities living in these areas.”

The Irish Sun’s Roisin Phelan went to Cobh herself and explained why its such a top destination.

She wrote: “Once called Queenstown, hundreds of people were saved off the coast after the ship Lusitania bound for Liverpool was torpedoed by a German submarine.

“The Titanic Experience Cobh is located in the centre of Cobh, in the original White Star Line ticket office, where hundreds of people bought their tickets for the ship in 1912.

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“For something more lighthearted, visitors can enjoy a walk down the promenade and a glance at all the colourful buildings of the town.

“You can sometimes even spot dolphins swimming in pods through the harbour.”

Make sure to catch the Dursey Island Cable Car too, when in Cork.

And if staying, there is the fancy The Address, with the hotel dating back to 1872 when used as a military hospital, or a new Premier Inn and Moxy which both opened this year.

Also in Cork is Kinsale, dubbed the Irish Riviera with multicoloured houses that look like Italy.

Or there is the small seaside town of Youghal with soft white sand.