USD/BRL forecast at 5.45 by year-end – Rabobank
|We continue to see the USD/BRL pair trading at 5.45 by end-2020 and at 5.10 by end of next year. They forecast the Brazilian GDP will drop by 7.3% in 2020 and pickup 4.5% in 2021.
Key Quotes:
“We continue to see the USD/BRL trading at 5.45 by end-2020 and 5.10 by end-2021.”
“Volatility seen in June is likely poised to remain until year-end. Externally, because of underlying US-China tensions, US elections, and a second Covid-19 wave. Domestically, the drivers are the uncertainties created by Covid-19, and their consequent fiscal costs.”
“In 2020, with falling demand and a more depreciated currency, imports will plummet (USD 148.1bn in 2020), exports will drop relatively less (USD 192.4bn), FDI will almost halve (at USD 43.5bn), and the current account deficit (CAD) should narrow to -0.9% of GDP in 2020. In 2021, with improving exports (USD 209.6bn), imports (USD 166.1bn), and FDI (USD 58.7bn), CAD would be -2.2% of GDP.”
“We still see the Selic rate at 2.25% by the end of the year and at 3.25% by end-2021.”
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.