USD/BRL to remain at the current levels just below 5.00 going forward – Commerzbank

In Brazil, inflation data is due today. Economists at Commerzbank analyze USD/BRL outlook ahead of the report.

Brazilian inflation data will act as an indicator for the BCB

Today’s inflation data might constitute an indicator illustrating whether the BCB had managed to avoid a dovish interpretation of its latest rate decision. 

In view of the fact that for the first time in 12 months, a rise of the YoY rate is expected not even a surprise to the downside should fuel rate cut expectations in our opinion. Instead, the future rate cut cycle is likely to have been priced into the real sufficiently, so that we expect USD/BRL to remain at the current levels just below 5.00 going forward.