FXStreet (Edinburgh) – Analysts at Goldman Sachs have revised higher their forecasts for USD/BRL to 3.55 in a 12-month view.
Key Quotes
“We are revising our 3-, 6- and 12-month $/BRL forecasts to 3.25, 3.35 and 3.55, from 3.20, 3.25 and 3.45”.
“The BRL/USD depreciated by approximately 33% between end-2012 and June 2015 but it still overvalued according to GSDEER”.
“In real multilateral terms, the degree of BRL depreciation has been visibly milder (less than 20%) than against the USD”.
“The Central Bank intervened repeatedly and heavily in the FX market between May 2013 and March 2015 (mostly via USD swaps)”.
“In recent months the Central Bank has been rolling over only partially the amount of maturing USD-swaps in order to keep the increasingly carry-rich BRL from appreciating”.
“We remain bearish on the BRL in the medium term given the weak and imbalanced domestic fundamentals and high domestic inflation. Ultimately, a weaker BRL is required to facilitate and accelerate the required macro adjustment”.
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