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BRL Outperforming As BCB Officials Strike Hawkish Tone

BRAZIL
  • Hawkish rhetoric from various BCB officials today is helping to support the Brazilian real, which is outperforming peers, up 0.8% of the day against the dollar. Earlier, BCB Governor Campos Neto noted the consistent worsening of inflation expectations for this year and next, and more recently 2026 as well, saying that this had become a point of concern.
  • This was followed by remarks from BCB Director Galipolo, who flagged similar concerns, saying that a higher terminal rate and inflation expectations put the Bank in a more delicate position.
  • USDBRL has fallen back towards the 5.25 level in recent trade, having briefly pieced 5.30 again on the open, leaving the pair broadly unchanged on the week. On the upside, a clear breach of key resistance at 5.2869, the Apr 16 high, would open 5.3330 next. Initial support to watch lies at 5.1919, the 20-day EMA.

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