BRL End 2017 Estimate Cut to 3.05/USD Vs 3.30/USD at Rabobank
(Bloomberg) -- BRL may be favored by less tight then expected U.S. Fed policy, Brazil reforms and commodities prices, Mauricio Oreng, strategist at Rabobank says in a phone interview.
- U.S. Fed may hike only once in 2017, leading U.S. Treasuries yields to retrace from recent levels; greater rate increase won’t be needed as economy growth will remain not strong enough to lead inflation to speed up
- BRL range for end 2017 seen at 3.05/USD to 3.25/USD depending on magnitude of U.S. Treasuries yields drop
- BRL gains in 2017 also considers a scenario of President Michel Temer keeping governability and passing social security reform in Congress
- BCB Copom likely to cut Selic rate by 50bps this Wednesday; greater move unlikely as BCB wants to assure inflation will continue anchored
- BCB does not need to cut rate by 75bps as there is no sign of ’’inflation undershooting’’
Alert:
HALISTER1Source: BFW (Bloomberg First Word)
Tickers RABO NA (Cooperatieve Rabobank UA)
0229181Z US (United States Social Security Administration)
People Mauricio Oreng (Banco Rabobank International Brasil SA)
Michel Temer (Federative Republic of Brazil)
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