USD/BRL broke below key support at the 5.00-level in a more consistent way after several attempts to do so. Although the Brazilian real may stay resilient longer than expected, in the end, economists at MUFG Bank forecast USD/BRL at 5.60 by end-2022.
More meaningful BRL depreciation in the second half
“The BRL could remain at strong levels for longer this year. However, we don’t see the bullish trend as sustainable in the medium to the long run.”
“On the domestic side, we consider that the campaign for the October presidential election might produce some noise, followed by growing concerns on how the new administration that will take office in 2023 will address the fiscal imbalance. Keep in mind that the current good figures don’t solve the structural fiscal problem.”
“In the external environment, we may expect some stabilization of commodity prices or not a huge raise, and the predominance of Fed actions in normalizing the monetary policy in the US.”
“We expect the BRL to re-weaken to the 5.60-level by year-end”
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
GBP/USD edges higher to near 1.2700 ahead of UK CPI inflation data
GBP/USD appreciates due to reduced expectations of another rate cut by the Bank of England this year. The UK’s CPI inflation is projected to increase 2.2% YoY and 0.5% MoM in October.
EUR/USD remains below 1.0600 amid safe-haven flows, awaits ECB Lagarde's speech
EUR/USD faces challenges due to safe-haven flows amid escalating Russia-Ukraine conflict. Traders anticipate that the incoming Trump administration's pro-inflationary policies could support the US Dollar.
Gold looks to test offers at $2,660 amid cautious optimism
Gold price stays on the front foot early Wednesday, looking to regain the $2,650 barrier as the road to recovery extends for the third straight day. Traders now await the upcoming speeches from US Fed policymakers and Nvidia’s earnings report amid lingering geopolitical concerns between Russia and Ukraine.
UK CPI set to rise above BoE target in October, core inflation to remain high
The UK CPI is set to rise at an annual pace of 2.2% in October after increasing by 1.7% in September, moving back above the BoE’s 2.0% target. The core CPI inflation is expected to ease slightly to 3.1% YoY in October, compared with a 3.2% reading reported in September.
How could Trump’s Treasury Secretary selection influence Bitcoin?
Bitcoin remained upbeat above $91,000 on Tuesday, with Trump’s cabinet appointments in focus and after MicroStrategy purchases being more tokens.
Best Forex Brokers with Low Spreads
VERIFIED Low spreads are crucial for reducing trading costs. Explore top Forex brokers offering competitive spreads and high leverage. Compare options for EUR/USD, GBP/USD, USD/JPY, and Gold.