OctaFX | OctaFX Forex Broker
Open trading account
Back

BRL seen at 4.5 in 2016 – BAML

FXStreet (Edinburgh) - In the view of BofA Merrill Lynch Global Research, the bearish tone is set to remain around the Brazilian currency.

Key Quotes

“Disappointing growth will likely lead to an easier Brazilian Central Bank and the market is now pricing in 185bp of hikes by the end of 2016”.

“We remain bearish BRL and like buying USD on dips, as the political uncertainty will likely continue. We forecast the BRL at 4.1 in 2015 and at 4.5 in 2016”.

“We now anticipate the recession to intensify and last longer, with activity not starting to recover until late 2016. We still expect GDP to contract 3.3% in 2015, but we revised our GDP forecast for 2016 to -3.5% from -1.4%”.

“We believe the government will face serious challenges in passing fiscal measures in Congress, as political noise remains high. This increases the uncertainty about the timing of a rebound in confidence levels and inhibits investments for a longer period of time”.

“In addition, purchasing power should decline further given high inflation, a loosening labor market, a tighter credit market and higher taxes”.

EUR/USD retreats further, tests 1.09

The common currency is now trading on a weaker tone against the dollar, taking EUR/USD to challenge the critical support at 1.0900...
Read more Previous

EUR/GBP hits fresh session lows after US data

The EUR/GBP pair hit a fresh session low of 0.7070 as the British Pound remained relatively resilient to the broad based USD rally.
Read more Next
Start livechat