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Commerzbank See Risk Of An Upward Correction In USD-BRL

BRAZIL
  • Yesterday, central bank chief Roberto Campos Neto commented on the latest increase. He said he was surprised by the increase and that monetary policy makers were analyzing the figures.
  • With the recent inflation developments and Campos Neto's concerned comments, speculation that monetary tightening may continue after all is likely to gain new fuel. This should further support the BRL. After all, the high interest rate level makes the currency attractive from an investor's point of view.
  • However, Commerzbank remain cautious, explaining the rally of the BRL since the beginning of the year seems to be overdone due to multiple risks related to fiscal policy and the upcoming presidential elections in October. In this respect, Commerzbank see the risk of an upward correction in USD-BRL.

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