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USDBRL Steady Ahead Of Monday’s Bimonthly Treasury Report

BRAZIL
  • Foreigners bought $1.1bn against BRL in the derivatives market on Thursday as the real at one point lost 1.9% against the dollar, according to Bloomberg, citing data from B3. USDBRL pared some of those gains late in yesterday’s session after finance minister Haddad announced a BRL 15bn spending freeze, and today the pair is trading close to unchanged, around 5.55, as the market awaits Monday’s bimonthly Treasury report.
  • For USDBRL, a resumption of gains would signal scope for a climb towards 5.7134, the 1.382 projection of the Dec 27 ‘23 - Apr 16 - May 3 price swing. The 50-day EMA, the next support, lies at 5.3746 and a clear break of this average would be needed to highlight a potential reversal.
  • Besides the bimonthly Treasury report, attention next week will also be on mid-month IPCA inflation data on Thursday, when the market expects the headline rate to rise further to 4.39% y/y.

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