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Further Optimism For Regional Currencies, Watching Support In USDBRL

LATAM FX
  • Price action for Latin American currencies on Thursday appears similar to yesterday’s trading session, largely benefitting from firmer equity benchmarks following the dovish hike from the ECB and the better-than-expected US activity data, leaving not much to support a bearish near-term US growth view.
  • USDMXN has shrugged off some early strength and hovers just above yesterday’s highs, however, both USDBRL (-0.68%) and USDCLP (-0.35%) are extending their most recent declines.
    • A bull cycle in USDBRL remains in play although the pair is narrowing the gap to support at 4.8416, the Aug 10 low. Clearance of this level would threaten the current bullish theme and expose key support at 4.6964, the Jul 28 low. The bull trigger remains at 5.0016, the Aug 18 high.

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