HALISTER1: Brazil Optimism on Temer Helps to Shore Up BRL: Analysts

Brazil Optimism on Temer Helps to Shore Up BRL: Analysts

(Bloomberg) -- BRL outperformance is underscored by improving prospects after suspended president Dilma Rousseff was replaced by Michel Temer, along with dimming outlook of US rate hike, analysts say.
  • Perception that new government will succeed in fixing the economy partially overshadows Brexit impact, Leonardo Monoli, partner-director at Jive Asset says in a e-mailed interview
  • “There has been a relevant improvement in the prospects over the positive effect that the measures took by Temer administration could have on the Brazilian economy”
  • BRL outperforms given the confidence in the new government’s ability to put economy on recovery path, Joao Paulo de Gracia, FX trading head at brokerage SLW says
  • NOTE: Arrest of former minister Paulo Bernardo yday was seen as hurting any attempt by Rousseff to return to power
  • While lower global rates do generate support for the BRL, the high interest-rate differential would not counter the effect of a rise in risk aversion, should a global recession take place, said Mauricio Oreng, a senior strategist at Rabobank in Sao Paulo says
Alert: HALISTER1
Source: BFW (Bloomberg First Word)

People
Dilma Rousseff (Federative Republic of Brazil)
Michel Temer (Federative Republic of Brazil)
Joao De Gracia Correa (SLW CVC Ltda/Brazil)
Leonardo Monoli (Jive Asset Gestao de Recursos Ltda)
Mauricio Oreng (Banco Rabobank International Brasil SA)

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