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USDBRL Hovers Above Support, Real Remains 2022 Best Performer

  • USDBRL made a new marginal low on Friday below 5.1163, the Aug 31, 2021 low. A sustained breach of this technical point would place the short-term support at 504.16, the late July 2021 low. Any further pressure on risk sentiment, prompting a consolidation may target the 20-day EMA at 5.2792.
    • BRL is still the world’s best performing major currency this year with USDBRL just under 8% lower in 2022.
  • Domestically the clear data focus will be on mid-month IPCA-15 inflation due Wednesday to for further clues as to whether the BCB will extend their hiking cycle beyond the March meeting.
    • Additionally, BCB President Roberto Campos Neto is scheduled to speak today at 1300 ET.
  • Local media is focused on the political alliances talks ahead of the October election.
    • A ticket formed by Lula and Sao Paulo’s former governor Geraldo Alckmin is considered almost certain and is one of the reasons behind bets Lula may seek a more centrist government if he is elected. (BBG)

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