FXStreet (Edinburgh) – The research team at BBH expects the Brazilian currency to depreciate further in the upcoming months.
Key Quotes
“Brazil’s central bank is reducing its rollover of FX swaps”.
“This signals that policy makers are not so concerned about further BRL weakness, which is another reason we think USD/BRL will head higher”.
“Brazil’s central bank this week cut the daily rollover auction amount to up to 6,300 FX swap contracts, down from 7,000 in previous days this month”.
“Meanwhile, IPCA inflation rose 8.47% y/y in May, the highest rate since 2003 and keeping the central bank on track for another 50 bp hike in July”.
“Markets are starting to price in a further 25 bp hike in September”.
(Market News Provided by FXstreet)