BRL May Test 3.00/USD Even If BCB Expands Actions: Analysts
Source: BFW (Bloomberg First Word)
People
Alexandre Tombini (Financial Stability Board)
Flavio Serrano (Haitong Bank SA)
Georgette Boele (ABN AMRO Group NV)
Gustavo Rangel (ING Groep NV)
Jose Goncalves (Banco Fator SA)
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(Bloomberg) -- While recent BRL gains have been driven by external low rates and lower domestic political risk that could open room for wider BCB actions, the currency is still likely to rally further, analysts say.
Alert: HALISTER1- Wider BCB interventions can’t be ruled out as BRL approaches 3.00/USD; however, it wouldn’t be as aggressive as actions when BCB was under Tombini’s governance, Vladimir Caramaschi, chief strategist at CA Indosuez Brazil, says
- “This BCB is more orthodox, is looking for the inflation-targeting regime, is less willing to intervene in the FX market”
- BCB interventions may remain focused on FX volatility instead of setting the prices; USD/BRL likely to drop further, nearing 3.00, amid impeachment and fiscal measures votes, Jose Goncalves, economist at banco Fator says
- BCB could see reasons to intervene if BRL gains further, as the currency has outperformed its peers and the rally may harm exporters, Gustavo Rangel, chief-economist at ING, says
- BCB can’t cut rates to weaken BRL because inflation remains a pressure; “for a while, the only option for BCB is the intervention”
- While BRL may rise toward 3.10 in the coming days and weeks, BCB will try to dampen the move, Georgette Boele, FX strategist at ABN Amro, says
- BCB may avoid further intervention even if BRL hits or breaches 3.00/USD level, Flavio Serrano, senior-economist at banco Haitong says
- BCB may increase actions only if BRL outperforms peers significantly; even in this case, the change in intervention would be slight
- BCB told Bloomberg it does not comment market assessments, when asked about the analysts’ views
Source: BFW (Bloomberg First Word)
People
Alexandre Tombini (Financial Stability Board)
Flavio Serrano (Haitong Bank SA)
Georgette Boele (ABN AMRO Group NV)
Gustavo Rangel (ING Groep NV)
Jose Goncalves (Banco Fator SA)
To de-activate this alert, click here
UUID: 7947283