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

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.