Brazilian Real: Below 50dma opens move to 5.00 – Societe Generale

FXStreet Insights Team FXStreet

Societe Generale highlights that USD/BRL has retreated to 5.07 after threatening 5.20 earlier in July, with the Brazilian Real (BRL) retaining a firm tone following soft United States (US) Producer Price Index (PPI) and lower Treasury yields. A second daily close below the 50-day moving average is seen as opening scope for a move back towards 5.00, helped by stronger retail sales and improving odds of President Lula retaining power.

Real supported by politics and data

"In LatAm, the BRL retains a firm tone after soft US PPI data yesterday deflated Treasury yields and curbed dollar strength. USD/BRL retreated to 5.07 after threatening to take out 5.20 earlier this month."

"The second daily close below the 50dma opens a potential move back towards 5.00, supported by improving odds of President Lula retaining power in the October presidential election. According to the latest Genial/Quaest survey, Lula’s lead over challenger Flavio Bolsonaro has widened to 8ppt (45% vs 37%) in a potential runoff scenario."

"The US share of Brazil’s trade has already fallen to a record low of 9.7% and, with many of the affected goods being essential commodities, the macroeconomic impact is likely to be limited. Politically, however, the tariffs may prove incrementally negative for Bolsonaro, who is generally viewed as being closer to Trump."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)

Author

FXStreet Insights Team

FXStreet

The FXStreet Insights Team is a group of journalists that handpicks selected market observations published by renowned experts. The content includes notes by commercial as well as additional insights by internal and external analysts.

AUD/USD rises to 0.6950 as USD slips on Fed's Warsh

AUD/USD regains traction and extends the bounce toward 0.6950 in the Asian session on Friday. Fed Chair Warsh's comments reinforce the selling pressure on the US Dollar, allowing the pair to stretch higher. Warsh said that he remains committed to delivering price stability without giving away anything on future interest rate path.

USD/JPY falls in symc with USD, gives up 158.00 after Warsh's speech

USD/JPY has come under fresh selling pressure and gives up 158.00 in the Asian session on Friday amid the emergence of fresh US Dollar selling. Fed Chair Warsh's non-committal commentary on the future tightening path, weighs on the US Dollar and the pair.

Gold looks vacillating above $4,150

Gold alternates gains with losses below the key $4,200 mark per troy ounce on Friday. The yellow metal’s irresolute price action comes in response to a modest pullback in the US Dollar and a tepid recovery in US Treasury yields across the board.

Bitcoin steadies at $82,000: The five forces crushing the Uptober rally

Crypto markets have remained under pressure so far in October, with Bitcoin (BTC) sliding below $80,000 earlier this week before recovering to around $82,000 on Friday, as macroeconomic headwinds and cooling demand weigh on the market.

The Fed just got a second hot inflation number. Here's what the diesel signal is really saying

The Federal Reserve (Fed) faces a renewed inflation challenge after two consecutive reports showed price pressure intensifying across the US economy. September's Consumer Price Index (CPI) confirmed accelerating consumer inflation, while the Producer Price Index (PPI) revealed an even sharper rise in business costs. Behind both reports lies a common factor: energy prices.

Everyone's dumping Gold after hot US inflation. Here's why $4,100 could be a floor, not a cliff

Gold (XAU/USD) is recovering from a sharp sell-off triggered by hotter-than-expected United States (US) inflation data released on Wednesday. The precious metal briefly plunged toward $4,073 as investors increased their bets on further Federal Reserve (Fed) interest rate hikes before recovering as US Treasury yields and the US Dollar (USD) reversed their initial gains.