HALISTER1: BCB May Maintain Auction Pace; BRL Gains Temporary: Rabobank

BCB May Maintain Auction Pace; BRL Gains Temporary: Rabobank

(Bloomberg) -- BCB is likely to maintain the strategy of cutting its swaps holdings without interfering in BRL/USD levels, Mauricio Oreng, senior-strategist at Rabobank, says in an e-mail interview.
  • BRL may strengthen further in coming days, given external environment of yield-seeking, as Fed keeps its rate on hold for a while and other CBs continue their expansionist stance
    • No signal of global recession in addition to “constructive” politics in Brazil also help BRL
    • BRL gains may be temporary and the pair may resume 3.40/3.50 level near 2016-ending with potential U.S. Fed hike in December
    • BCB in near term may keep the pace of FX reverse swaps auctions; a pause is possible later in the year should the prospect of a weaker BRL materialize
Alert: HALISTER1
Source: BFW (Bloomberg First Word)

Tickers
RABO NA (Cooperatieve Rabobank UA)

People
Mauricio Oreng (Banco Rabobank International Brasil SA)

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