MNI: PBOC Net Drains CNY288.1 Bln via OMO Friday

MNI: PBOC Sets Yuan Parity Lower At 7.1848 Fri; -1.64% Y/Y

MNI BRIEF: Japan Oct Real Wages Unchanged Y/Y

BRIEF: EU-Mercosur Deal In Final Negotiations - EC

MNI China Daily Summary: Thursday, Dec 5

MNI BRIEF: China Construction Output Slows In November

US EIA:NAT GAS STORAGE -30 BCF TO 3,937 BCF NOV 29 WK

MNI: CANADIAN OCT TRADE BALANCE CAD -0.9 BILLION

MNI: US OCT TRADE GAP -$73.8B VS SEP -$83.8B

MNI EXCLUSIVE: EU-Mercosur Deal Close, But Likely Short-Lived - Officials

AUSTRALIA: 2025 Election Outcome Looking More Uncertain According To Newspoll

© 1982-2024 MNI. All rights reserved.
Terms | Privacy
Log Out
Free Trial

BRAZIL: BRL Closes at 3-Week High, Central Bank Divergence in Focus

BRAZIL
EM BulletBulletGlobalEmerging Market NewsRegion
  • The Brazilian real closed at its highest level since Aug 27 on Monday as the weakening dollar and central bank divergence assisted the latest recovery. Despite the further moderate weakening of the USD index on Tuesday, recent BRL optimism may be tempered by overnight comments from Finance Minister Haddad, who said Brazil’s central bank will have to consider declining global rates when it sets monetary policy on Wednesday.
  • As well noted, markets have been adjusting bets in favour of a bolder cut from the Fed, and with consensus expecting the BCB to start a tightening cycle this week, we could be at a pivotal juncture for USDBRL. Further evidence of the hawkish BCB turn was evident in Monday’s Focus survey, as the 2025 year-end Selic rate forecast was raised again.
  • Despite bullish technical conditions in USDBRL remaining intact up to this point, the latest price action has seen support at the 50-day EMA be breached and focus will remain on key support, which lies at 5.3768, the Aug 19 low.
168 words

To read the full story

Close

Why MNI

MNI is the leading provider

of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.

Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
  • The Brazilian real closed at its highest level since Aug 27 on Monday as the weakening dollar and central bank divergence assisted the latest recovery. Despite the further moderate weakening of the USD index on Tuesday, recent BRL optimism may be tempered by overnight comments from Finance Minister Haddad, who said Brazil’s central bank will have to consider declining global rates when it sets monetary policy on Wednesday.
  • As well noted, markets have been adjusting bets in favour of a bolder cut from the Fed, and with consensus expecting the BCB to start a tightening cycle this week, we could be at a pivotal juncture for USDBRL. Further evidence of the hawkish BCB turn was evident in Monday’s Focus survey, as the 2025 year-end Selic rate forecast was raised again.
  • Despite bullish technical conditions in USDBRL remaining intact up to this point, the latest price action has seen support at the 50-day EMA be breached and focus will remain on key support, which lies at 5.3768, the Aug 19 low.