9 Mar 2015
Brazilian real poised for further declines? – Scotiabank
FXStreet (Edinburgh) - Chief FX Strategist Eduardo Suarez at Scotiabank hints at the possibility of further weakness ahead for the Brazilian currency.
Key Quotes
“A series of domestic and external factors led the BRL to lose ‐2.0% vs. the greenback last Friday, leaving the USD/BRL cross at levels we had not seen since 2004”.
“On the domestic front, the BRL was pressured by a 7.7% inflation print, which was the highest since 2005, with part of the inflation surprise being attributed to a large spike in electricity prices”.
“The other domestic factor that hurt the BRL, was Planning Minister Nelson Barbosa's statement that the BRL's valuations are the result of internal and external factors, and that the BCB needed to maintain its FX reserves as a buffer, which was taken by markets that a ramp up in intervention at these levels is not considered”.
“On the external front US non‐farm payrolls contributed with broad USD strength”.
Key Quotes
“A series of domestic and external factors led the BRL to lose ‐2.0% vs. the greenback last Friday, leaving the USD/BRL cross at levels we had not seen since 2004”.
“On the domestic front, the BRL was pressured by a 7.7% inflation print, which was the highest since 2005, with part of the inflation surprise being attributed to a large spike in electricity prices”.
“The other domestic factor that hurt the BRL, was Planning Minister Nelson Barbosa's statement that the BRL's valuations are the result of internal and external factors, and that the BCB needed to maintain its FX reserves as a buffer, which was taken by markets that a ramp up in intervention at these levels is not considered”.
“On the external front US non‐farm payrolls contributed with broad USD strength”.