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IIF chief economist Robin Brooks says the Brazilian real is the most undervalued emerging market currency, about 20% below his fair value estimate of 4.50 per dollar. The real was near 5.32 per dollar at the time, and is recovering on a current account surplus and improving portfolio flows.
A real that strengthens toward fair value would make Brazilian soybeans and meal costlier in dollar terms, which can firm global soy and meal prices. It would also raise Brazilian feed import costs.
forexcrunch.comFX StreetNov 26, 2020After 213 past bearish macro events, Brazilian Real (BRL per USD) moved a median -0.2% over 5 sessions (46% higher; middle half -1.5% to +0.9%), and +0.2% over 20.
After 73 past neutral macro events, Soybean Meal moved a median -0.3% over 5 sessions (44% higher; middle half -1.9% to +2.1%), and -1.6% over 20.
Moves of each commodity's benchmark from the last close before the event. Historical reads pool past events of the same kind; they describe what happened, not what will. Not investment advice.
