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USDBRL Falls Towards Initial Support As Fiscal Concerns Ease

BRAZIL
  • The Brazilian real rallied further yesterday, gaining another 1.22% against the dollar, following Finance Minister Haddad’s remarks that President Lula has ordered compliance with the fiscal framework as well as a cut of R$25.9 billion in fiscal expenditure in relation to the 2025 Budget. USDBRL has now fallen almost 3.8% from Wednesday’s highs to 5.4853, close to initial support at 5.4622, the 20-day EMA.
  • With no domestic data due today, focus will be on the US employment report at 1330BST(0830ET). Looking into next week, the highlight will be June IPCA inflation data on Wednesday, followed by May retail sales figures on Thursday.
  • In other news, local media reported yesterday that federal police have recommended criminal charges against former President Jair Bolsonaro after probing the alleged illegal sale of gifts received from the governments of Saudi Arabia and Bahrain. Following the charges, the prosecutor general’s office will now decide whether to file a complaint.

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