Brazilian Real: Exchange rate seen weaker into year-end – Rabobank
Rabobank’s Mauricio Une and Renan Alves note that the Federal Reserve (Fed) raised rates by 25 bps and signaled a more restrictive stance, while Copom cut the Selic rate to 13.75%. The Brazilian Real (BRL) weakened slightly to BRL 5.1462 per USD but still outperformed most emerging peers.
Rabobank's analysts Mauricio Une and Renan Alves predict the Brazilian Real (BRL) will continue to weaken into the year-end, with the exchange rate potentially reaching BRL 5.35 per USD. This forecast comes after the Federal Reserve (Fed) raised interest rates by 25 basis points and signaled a more restrictive monetary policy, while Brazil's Central Bank (Copom) cut the Selic rate to 13.75%.
The depreciation of the BRL marks the ninth-best performance among 24 emerging-market currencies over the past week, with the real falling 0.49% against the U.S. dollar. Rabobank expects a narrower rate differential between Brazil and advanced economies, coupled with a potential global recovery of the U.S. dollar amid a fragile fiscal backdrop in an election year, to contribute to the BRL's weaker trajectory in 2026.
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