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BRAZIL: USDBRL Falls To Fresh Weekly Lows Amid Spending Cut Discussions

BRAZIL
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  • USDBRL has fallen to fresh weekly lows in recent trade, amid hopes that agreement on a spending cut package is close, with the pair currently ~0.6% lower on the day around 5.75. The move leaves the pair almost 1% below the session highs and 2% down from levels reached on Friday. At the same time, DI swap rates have fallen another 5-7bp today in the belly and long-end of the curve.
    • As noted earlier, the government’s chief of staff Rui Costa is holding more meetings today with various ministries and President Lula to discuss details of the package. Yesterday, Finance Minister Haddad said that the spending cuts plan may be released this week.
    • For USDBRL, trend conditions remain in bull mode, however, the latest pullback has narrowed the gap to initial support at 5.6941, the 20-day EMA. Firm support resides at 5.6213, the 50-day EMA.
    • Beyond today’s US election and potential fiscal developments in Brazil, attention will turn to tomorrow’s Copom meeting when a 50bp Selic rate hike is expected. A full MNI preview of the meeting, with analyst views is here: https://mni.marketnews.com/4fwT4ES
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  • USDBRL has fallen to fresh weekly lows in recent trade, amid hopes that agreement on a spending cut package is close, with the pair currently ~0.6% lower on the day around 5.75. The move leaves the pair almost 1% below the session highs and 2% down from levels reached on Friday. At the same time, DI swap rates have fallen another 5-7bp today in the belly and long-end of the curve.
    • As noted earlier, the government’s chief of staff Rui Costa is holding more meetings today with various ministries and President Lula to discuss details of the package. Yesterday, Finance Minister Haddad said that the spending cuts plan may be released this week.
    • For USDBRL, trend conditions remain in bull mode, however, the latest pullback has narrowed the gap to initial support at 5.6941, the 20-day EMA. Firm support resides at 5.6213, the 50-day EMA.
    • Beyond today’s US election and potential fiscal developments in Brazil, attention will turn to tomorrow’s Copom meeting when a 50bp Selic rate hike is expected. A full MNI preview of the meeting, with analyst views is here: https://mni.marketnews.com/4fwT4ES