FXStreet (Córdoba) – USD/BRL is trading modestly lower on Wednesday but earlier climbed to 3.185, hitting the strongest level since early April. Afterwards pulled back and it was hovering around 3.150, almost 5% above the level it had a week ago. During the last five days, the Brazilian real has been among the worst performers in the forex market.
Data and events ahead for Brazil
On Thursday there will be new data on inflation and on Friday on Q1 GDP growth while next Wednesday the central bank will decide on monetary policy. “Governor Tombini’s newfound hawkish inclination, along with the new appointments to the bank’s board, has led the market to consolidate expectations for a 50 bp hike at next week’s meeting (in line with our long held view)”, wrote strategist Ilan Solot from Brown Brothers Harriman.
Solot also explained that they we remain bearish on the Brazilian real. “We think the incredibly high carry will, sooner or later, limit or at least slow down the upward movement of USD/BRL. But the trend is upwards, in our view”.
USD/BRL is trading modestly lower on Wednesday but earlier climbed to 3.185, hitting the strongest level since early April. Afterwards pulled back and it was hovering around 3.150, almost 5% above the level it had a week ago.
(Market News Provided by FXstreet)