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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.
EM FX
- Despite the CBB increasing the pace of its tightening cycle, hiking the policy rate (Selic) by 100bps at the last two meetings, political uncertainty and rising inflationary pressures have been weighing on the BRL.
- The BRL was the second weakest performer in September (after TRY) among the EM world, down 5.3% against the US Dollar.
- On the other hand, the RUB has remained strong last month and was the best EM FX performer, up 0.7% against the USD.
- Even though inflationary pressures in Russia are also elevated, the strong momentum in oil prices could have been one of the factors behind RUB strength in recent weeks.
- We previously saw that RUB is the oil-producer currency that is still strongly sensitive to the dynamics of oil prices (i.e. positive beta on change in oil prices).
- Momentum on BRLRUB has been bearish in the past few months. The pair found support at 13.31 yesterday, which corresponds to the 23.6% Fibo retracement of the 12.38 – 16.30 range. A break below that level would open the door for a move down to 13. On the topside, resistance to watch stands at 13.88 (38.2% Fibo).
Source: Bloomberg/MNI
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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