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 holds its interest rate steady at a high level, while the US Federal Reserve has paused its rate cuts, creating a favorable outlook for the BRL.
• Risk/commodities: Lower volatility in global oil prices is supporting strong demand for Brazil’s agribusiness exports, which helps bolster the BRL.
• One macro factor: Renewed geopolitical tensions and changes in U.S. trade policy are negatively impacting the USD, which could benefit the BRL.
Range:
The BRL/USD rate is likely to drift in the current range, showing stability.
What could change it:
• Upside risk: Stronger than expected job data from the U.S. could lead to increased demand for USD.
• Downside risk: Any new fiscal measures from Brazil that signal instability could weaken the BRL.
