Banco do Brasil Brazilian real (BRL) Transfers Compared

Bias Bias: Range-bound, USD/BRL sits near the 90-day average and in the middle of the 3-month range, offering little pressure for a breakout. Key drivers - Rate gap: The Fed is seen cutting rates toward neutral in 2026, while Brazil holds the Selic high, keeping a gap that supports BRL when risk appetite rises but caps gains otherwise. - Risk/commodities: Oil is at 90-day highs and volatile, which can support BRL on export income but adds trading noise to USD/BRL. - Macro backdrop: Inflation in Brazil remains above target, keeping the door open for further tightening and for yields to stay attractive. Range USD/BRL is likely to drift within the 3-month range, with little pressure to break out and a tilt to the middle, aided by liquidity that tends to prevent sudden spikes. What could change it - Upside risk: A strong US payrolls print or hawkish Fed rhetoric could lift the dollar and extend the move higher in USD/BRL. - Downside risk: A clearer path for US rate cuts or softer US data could weaken the dollar and lift BRL. USD/BRL: range-bound near the 3-month avg, drifting to the middle. Fed seen cutting toward neutral in 2026; BRL supported by the Selic and oil at 90-day highs. Upside risk: strong US payrolls; downside: clearer US rate cut path or softer data