HALISTER1: BRL Weakens on Temer’s FX Comments; U.S. Data Ease Move: Mizuho

BRL Weakens on Temer’s FX Comments; U.S. Data Ease Move: Mizuho

(Bloomberg) -- Acting President Temer’s comments to Valor, along with below-est. Chinese data, help to weaken BRL, while prospect of continued low rates in the U.S. temper the move, Luciano Rostagno, chief strategist at Banco Mizuho do Brasil, says in a phone interview.
  • Country needs FX to underpin exports as this is the main channel for economic recovery, along with investments, Rostagno says
  • While BCB reverse swaps auctions hold BRL gains, interventions aren’t aimed to push the currency into a weakening trend
  • Weak U.S. data reinforces idea that Fed won’t hike soon, favoring EMFX
  • NOTE: Temer told Valor that Brazil needs a balanced currency
Alert: HALISTER1
Source: BFW (Bloomberg First Word)

People
Luciano Rostagno (Banco Mizuho do Brasil SA)
Michel Temer (Federative Republic of Brazil)

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