USD/BRL: Political headwinds facing the real – CIBC

FXStreet Team FXStreet

USD/BRL continued its upward trend, approaching the 6.0 mark. Luis Hurtado from CIBC Capital Markets sees political tensions and a dovish BCB to weigh on the Brazilian real.

Read about last USD/BRL moves

Key quotes

“A Supreme Court investigation on President Bolsonaro and his family already caused the resignation of the former head of the federal police and the Minister of Justice Sergio Moro, via alleged political pressures by the president. Investigation leaks will continue to be harmful for those with long BRL positions.”

“We’ve revised our Selic rate forecast to 2.0%-2.25% by the end of 2020. The clear dovish stance by the BCB, despite larger fiscal risks, should also put pressure on the BRL in the short-term.”

“We revised our USD/BRL forecast for Q2 to 5.50.”

Author

FXStreet Team

FXStreet

Composed of a group of economic journalists and FX experts, the FXStreet content team produces and oversees all content published on FXStreet. It provides a purely journalistic approach to the Forex market.

GBP/USD treads water around 1.3400 as Hormuz risks lift USD

GBP/USD trades with caution around 1.3400 in European trading on Monday, away from an over three-week high, or levels just above the 1.3500 psychological mark touched on Friday. The pair faces headwinds from a modest US Dollar rebound as investors rush to safety amid renewed jitters on the reopening of the Strait of Hormuz and US-Iran talks.

EUR/USD consolidates below 1.1600 amid Mideast tensions

EUR/USD kicks off the new week on a subdued note and trades below 1.1600 in the European morning on Monday, well within striking distance of a fresh high since June 17, touched in reaction to the disappointing US jobs data on Friday.

Gold climbs back to $4,350; remains below June 17 high

Gold reverses a modest intraday dip, and climbs to the top boundary of its daily range, closer to the $4,350 level heading into the European session. The commodity, however, remains below its highest level since June 17, touched on Friday, following the release of the US Nonfarm Payrolls report.

Cardano: Bulls eye a second leg higher as whales buy

Cardano trades above $0.196 at the start of the week after posting double-digit gains over the past two weeks. ADA’s bullish price action is supported by steady whale accumulation. Meanwhile, derivatives sentiment is showing a slight bullish tilt, suggesting a second leg higher for ADA.

The hottest trade of 2026 has a problem

The carry trade has been one of the biggest winners of the year, helped by low volatility, wide interest-rate gaps, and a relatively stable dollar. But now, parts of that setup are starting to crack.

9-3: Is the Federal Reserve’s vote tally Warsh's new forward guidance?

The rate did not move. Neither did the statement, and that’s the more interesting fact. Set the July 29 Federal Open Market Committee (FOMC) statement beside the one issued on June 17, and the two documents are identical apart from a single verb and a paragraph at the bottom naming three dissenters.