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USDBRL Consolidates At Moderately Lower Levels Following Fitch Upgrade

BRAZIL
  • The Brazilian real was volatile at Wednesday’s open as the initial boost from Fitch’s upgrade was offset by the substantial miss on the June current account balance and foreign direct investment data.
  • Overall, USDBRL remains in a downtrend and this week’s move lower has confirmed a resumption of the medium-term bear cycle - support at 4.7513, the Jun 22 low, has been cleared. This opens 4.6910 next, the May 30 2022 low. Key resistance is at 4.8668, the 50-day EMA. Initial resistance is at 4.8093, the 20-day EMA.
  • Latest headlines filtering through from finance minister Haddad:
    • Taxing private funds, offshore helps 2024 budget
    • Brazil govt seeks zero primary deficit in 2024
    • Brazil treasury sees 2023 fiscal deficit in 1% of GDP
    • Brazil to propose closed-end funds tax in 2024 budget
    • Brazil govt is working to curb interest rates
    • Brazil govt seeks to pass taxation of offshore funds (BBG)

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