BRL/USD Outlook:
Slightly positive, but likely to move sideways, as the rate is above its recent average but lacks a clear driver.
Key drivers:
- Rate gap: The Central Bank of Brazil's steady SELIC rate at 15% contrasts with the Federal Reserve holding rates at 3.5%–3.75%, aiding the BRL's strength.
- Risk/commodities: Recent gains in oil prices have not significantly influenced the BRL, keeping it stable against fluctuations in global commodity markets.
- One macro factor: The Brazilian government's revision of its fiscal target has raised concerns but has not yet significantly pressured the BRL.
Range:
The BRL/USD pair is likely to test extremes in the current trading range, potentially showing slight volatility.
What could change it:
- Upside risk: A significant improvement in the U.S. job market could boost confidence in USD, impacting the BRL/USD rate.
- Downside risk: Increased geopolitical tensions affecting the U.S. could lead to a further decline in the USD, lowering BRL's position.
