After opening at an alltime high,....>

BRAZILIAN REAL: After opening at an alltime high, USD/BRL continues to climb,

notching up a new high print at 5.8202 following the larger than expected rate

cut from the Brazilian central bank late yesterday. The BCB cut rates by 75bps

to 3.00%, eyeing further rate cuts down the line although 'not larger than

75bps' as there are limits to the degree of future rate cuts.

- Pressure on the BRL is not only stemming from the BCB, however, with a

congressional package approved yesterday that allows over $120bln in spending

pledges from government as well as allowing the BCB the ability to buy corporate

bonds.

- Political tensions are still running higher, however, after Bolsonaro's

popularity ratings took a dive on his controversial and laissez-faire approach

to tackling the Coronavirus outbreak in Brazil; particularly after sacking his

health minister in mid-April.

- New alltime high in USD/BRL sits at 5.8202, with 5.9300 the immediate upside

target, marking the 123.6% extension of the March-April rally.