The GBP to BRL exchange rate is currently bearish, trading at near 30-day lows.
Key drivers include:
- The Bank of England's cautious stance on future rate cuts, with rates expected to decline gradually, maintaining pressure on GBP.
- Brazil's Central Bank has held interest rates steady at 15% amid persistent inflation, which may stabilize the BRL.
- Economic growth in the UK is projected to slow, while Brazil faces challenges from heightened trade tensions with the US, further weighing on both currencies.
In the near term, the GBP to BRL is likely to trade within a volatile range.
Upside risks include potential improvements in UK economic data or changes in interest rate policy that favor GBP. Downside risks might arise from worsening geopolitical tensions impacting the BRL or unexpected shifts in oil prices, as current oil levels remain slightly above average but could influence Brazil's economic outlook.