the brazilian real it has remained stable against the dollar. However, as ING economists report, the USD/BRL pair could rise as politicians could increase their pressure on the Brazilian central bank.
When politics and central banking collide
“Politicians are looking forward to the central bank starting to cut interest rates. However, in its most recent update, the central bank has warned that long-term inflation expectations are drifting further off target, which clearly contradicts calls for rate cuts.”
“With underlying rates this high, we doubt investors will have much patience for this type of friction and we would favor a further underperformance of the Real.”
“If politicians increase their pressure on the Brazilian central bank, USD/BRL could trade as high as 5.40.”
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
