USD/BRL: 6.00 is a realistic upper barrier – Credit Suisse
|Analysts at Credit Suisse think the more forceful FX intervention language and improved external sentiment warrant a range approach to USD/BRL, targeting a 5.20-6.00 range for now, as they have a more mildly bearish BRL view.
See: USD/BRL forecast at 5.50 for Q2 – CIBC
Key quotes
“We still have a fundamentally bearish BRL outlook, but we acknowledge that further BRL strength is possible in the near-term if the sanguine bias in risky assets were to persist, leading to further USD weakness.”
“The timing of the BCB Governor Campos’ statement on FX intervention, right around the time when USD/BRL seemed close to testing the 6.00 level, will likely be taken by many in markets as a rough signal of the BCB’s intentions with regards to FX.”
“The 6.25 target we identified two weeks ago might prove too ambitious even as an upper barrier to a possible USD/BRL range: we think that 6.00 would be a more realistic upper barrier for this purpose.”
“On the downside, we think the area around 5.17-5.20, where the USD/BRL rally had stalled in early April, represents a valid near-term lower barrier.”
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.