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BCB Intervention, Disappointing Retail Sales

BRAZIL

Yesterday's intervention from the BCB capped the price action just below 5.45 with USDBRL weakening back to close 5.3824. This was the first intervention since January 11th where USDBRL was nearer to 5.50, however, showing similar daily weakness. The weakness was unique to Brazil with a notable near 2% decline in BRLMXN from 3.76 to 3.69.


It was interesting that the intervention came shortly after Campos neto had been making comments on FX volatility, attributing the weakness to fiscal risk premium.


Very weak Retail Sales report:

  • BRAZILIAN DECEMBER RETAIL SALES -6.1 % M/M VS -0.8% EST. (bbg)
  • BRAZILIAN DECEMBER RETAIL SALES +1.2% Y/Y VS 5.5% EST. (bbg)

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