Trump and Lula's Unexpected Alliance Raises Eyebrows

U.S. President Donald Trump has revealed plans for a meeting next week with Brazilian President Luiz Inacio Lula da Silva, citing 'excellent chemistry' during their brief encounter at the U.N. General Assembly. Despite previous confrontations due to the trial of former Brazilian President Jair Bolsonaro, Trump expressed a positive outlook.

The announcement had an immediate impact on Brazilian markets, with the real currency strengthening by 1% against the U.S. dollar, and the Bovespa stock index surged by more than 1% to achieve an all-time high. Lula's sharp critique of U.S. foreign policy, presented at the General Assembly, did not deter the optimistic market response.

Lula condemned the Trump administration's retaliatory actions, including tariffs and sanctions after Bolsonaro's conviction for a coup attempt following his 2022 electoral defeat. The Trump administration had earlier imposed a 50% tariff on many Brazilian goods, framing it as a counter to a 'witch hunt' against Bolsonaro.

(With inputs from agencies.)