Michael Every, Senior Asia-Pacific Strategist at Rabobank, notes that Brazilian President Temer has refused to resign despite a new corruption scandal, mean that ”the only certainty is that the Brazilian roller coaster is definitely back on in the short run,” in the words of our own Maurico Oreng-is-the-new-black.
“Indeed, his call here that in a simulated scenario of mild political stress USD/BRL could go to near 3.50, and in greater stress towards 4.45 seems entirely realistic when one considers that yesterday BRL already spiked from 3.10 to 3.37(!) while Brazilian equities crashed 8.8%. In short, there are now two political scandals in the Americas that will keep us up at night.”
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