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Having spent much of the session.....>

BRAZILIAN REAL
BRAZILIAN REAL: Having spent much of the session pressuring the 4.00 handle
yesterday, USD/BRL has reversed course Wednesday, turning lower to approach the
Friday low of 3.9313 and leading the BRL to outperform broader LatAm FX. Some
analysts have pointed toward the appointment of Baldy (a key ally to the lower
house speaker Maia) as the government's Cities Minister as soothing tensions
between Bolsonaro and Lower House lawmakers and thus making pension reform's
passage somewhat easier. Furthermore, opinion polling has worked in favour of
the government, with close to 60% of respondents recognising the necessity of
reform.
-For USD/BRL, next support kicks in at the 50-dma at 3.8684 and the 200-dma at
3.8499. Closer to market, 23.6% Fib support kicks in at 3.9265.
-The Brazilian central bank hold their rate decision later today and are
expected to keep rates unchanged (although one analyst surveyed sees a 50bps
cut). While the global macro backdrop remains fraught, inflation is still
running hot, giving the BCB little justification to move rates lower this month.
The decision is due at 2200BST/1700ET.
MNI London Bureau | +44 203-865-3809 | edward.hardy@marketnews.com
MNI London Bureau | +44 203-865-3809 | edward.hardy@marketnews.com

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