Brazilian Real: Fiscal risks point to weakness against US Dollar - Rabobank
Rabobank’s Mauricio Une and Renan Alves note softer United States (US) inflation and cooling labor data, giving the Federal Reserve (Fed) more time to assess policy.
Rabobank's Mauricio Une and Renan Alves highlight Brazil's fiscal risks and the potential for the Brazilian Real to weaken against the US Dollar. Softer US inflation and labor data have given the Federal Reserve more time to assess policy, while Brazil's central bank minutes reveal a gradual transmission of restrictive policy and unanchored inflation expectations.
With a fragile fiscal backdrop and narrowing rate differentials, Rabobank predicts the Brazilian Real to reach BRL 5.35 per US dollar by year-end. The US Dollar benefits from the risk-averse market atmosphere due to high tensions in the Middle East, making it challenging for the Brazilian Real to strengthen.
Written by urgent.news from FXStreet's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
