The Brazilian real weakened past 5.6 per USD, nearing the one-month low of 5.65 reached on September 3rd, as a rebounding US dollar and ongoing fiscal concerns weighed on the Brazilian currency. Although inflation eased to 4.24% in August, broadly in line with expectations, it failed to alter the hawkish outlook for the Brazilian central bank’s monetary policy. Market participants largely anticipate a 25 basis point rate hike by the BCB, driven by mounting inflationary pressures linked to increased fiscal spending, as highlighted in recent GDP figures. While government transfers have temporarily supported consumer spending, this dependence raises doubts about the sustainability of Brasilia’s expansionary fiscal approach, exacerbating inflation expectations and adding pressure on the real. The budget deficit ballooned to BRL 21.3 billion in July, significantly surpassing forecasts and heightening concerns that the government will maintain its looser fiscal stance.
The USDBRL decreased 0.0336 or 0.59% to 5.6355 on Thursday September 12 from 5.6691 in the previous trading session. Historically, the USDBRL reached an all time high of 5.99 in May of 2020. Brazilian Real - data, forecasts, historical chart - was last updated on September 12 of 2024.
The USDBRL decreased 0.0336 or 0.59% to 5.6355 on Thursday September 12 from 5.6691 in the previous trading session. The Brazilian Real is expected to trade at 5.65 by the end of this quarter, according to Trading Economics global macro models and analysts expectations. Looking forward, we estimate it to trade at 5.75 in 12 months time.