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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.
LATAM FX
- Commenting on Wednesday’s lower-than-expected half month IPCA inflation data, Goldman Sachs believe that the inflation dynamics support the continuation of a gradual easing cycle, but note that underlying core-services inflation merits attention. JP Morgan also note the upward trend in core and core services inflation since the end of last year, but see this setback as mostly temporary and expect to see lower numbers ahead, particularly in Q2.
- After outperforming early in the week, on the back of the lower-than-expected inflation data, BRL gave back some gains against the dollar across Wednesday and Thursday, taking USDBRL back to briefly test the upper bound of its most recent range at the all-important pivot level of 5.00.
- The pair has remained in a tight range through February, and implied volatility has been sinking as a result, consistent with the pattern seen elsewhere in the region with currencies such as MXN and COP. Indeed, the one-month implied volatility for USDBRL reached as low as 9.00%, the lowest level since mid-2014. Historically, implied volatility has not remained this low for long.
- Figure 1: USDBRL One Month Implied Volatility (%):
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.
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