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TD Securities expects the Central Bank of Brazil to intervene in the spot market only when real-economy dollar flows are out of balance, not to prevent broader weakness in the real. It also forecasts the bank will slow its rate cuts to 25 basis point steps to avoid unsettling markets.
Expectations of limited intervention and smaller rate cuts suggest the real may stay weak, keeping Brazil's import costs elevated. A slower easing cycle also reduces the chance of a sharp currency rebound.
octaafrica.netNov 27, 2019After 92 past neutral macro events, Brazilian Real (BRL per USD) moved a median +0.4% over 5 sessions (58% higher; middle half -0.7% to +1.4%), and +0.4% 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.
