The USD to BRL exchange rate is currently range-bound.
Key drivers influencing this stability include:
- The Federal Reserve is expected to cut interest rates, which could weaken the USD over the coming months.
- Brazil's Central Bank may begin reducing its Selic rate, potentially impacting investment sentiment in the BRL.
- Ongoing concerns regarding Brazil's fiscal health and government debt are likely to weigh on the currency.
The near-term trading range is expected to remain stable but active, reflecting the recent price activity just below the three-month average, with fluctuations within a moderate tolerance.
An upside risk could arise from improved global economic growth driving commodity prices, benefiting the BRL. Conversely, a downside risk lies in the uncertainty surrounding Brazil's political landscape and fiscal policies, which could trigger increased volatility in the exchange rate.
