When interest rates in Brazil rise relative to those in the United States, it typically attracts foreign investment to Brazil as investors seek higher returns. This increased demand for the Brazilian real (to invest in Brazilian assets) can lead to an appreciation of the real relative to the U.S. dollar. Conversely, with the capital flowing out of the U.S. to Brazil for better returns, the U.S. dollar may depreciate.
Therefore, the correct description of the change in values of the Brazilian real and the U.S. dollar with respect to one another is:
The U.S. dollar is depreciating while the Brazilian real is appreciating.
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