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BRAZIL: USDBRL Rises 0.8% As Fiscal Concerns Continue To Weigh

BRAZIL
BulletEM BulletEmerging Market News
  • Despite some supportive comments from Senate Leader Pacheco on Friday, who said that changes in income tax rules is not something to be done immediately, as well Finance Minister Hadad who added that it could be delayed until 2025, Brazilian assets have started the week on the back foot, with USDBRL rising back above the 6.00 level in early trade.
  • The move comes after the latest BCB focus survey which revealed a further increase in analyst CPI and Selic rate expectations. After JP Morgan raised their 2025 Selic peak forecast to 14.25% last week, analysts see the Selic ending next year at 12.63% and 2026 at 10.50%. Attention will now turn to the debate in Congress, where both houses must approve the government’s spending cut plan.
  • USDBRL rose as high as 6.0356 on the open, before paring gains, currently 0.8% higher on the day, at typing. Sights are on 6.1460 and 6.1831, the 2.3820 and 2.50 projections of the Aug 19 - 30 - Sep 19 price swing, while support levels to watch are 5.8330, the 20-day EMA, and 5.7261, the 50-day EMA.
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  • Despite some supportive comments from Senate Leader Pacheco on Friday, who said that changes in income tax rules is not something to be done immediately, as well Finance Minister Hadad who added that it could be delayed until 2025, Brazilian assets have started the week on the back foot, with USDBRL rising back above the 6.00 level in early trade.
  • The move comes after the latest BCB focus survey which revealed a further increase in analyst CPI and Selic rate expectations. After JP Morgan raised their 2025 Selic peak forecast to 14.25% last week, analysts see the Selic ending next year at 12.63% and 2026 at 10.50%. Attention will now turn to the debate in Congress, where both houses must approve the government’s spending cut plan.
  • USDBRL rose as high as 6.0356 on the open, before paring gains, currently 0.8% higher on the day, at typing. Sights are on 6.1460 and 6.1831, the 2.3820 and 2.50 projections of the Aug 19 - 30 - Sep 19 price swing, while support levels to watch are 5.8330, the 20-day EMA, and 5.7261, the 50-day EMA.