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2 Apr 2015
USD/BRL revised higher – BAML
FXStreet (Edinburgh) - Analysts at BAML now expect the pair to surpass previous forecasts.
Key Quotes
“To estimate BRL valuation against the USD, we assess whether the USD move this year constitutes convergence to a stronger fundamental equilibrium”.
“If it does, USDBRL equilibrium would be at 3.44. If the USD bounce proves cyclical, it would be at 3.17”.
“We revise our 2015 eop BRL forecast to 3.40 from 3.00 and 2016’s to 3.60 from 3.10”.
“Also, the BCB decided not to extend the FX swap program that was scheduled to come to an end at the end of March, as expected. The BCB announced that the FX swaps that mature on 1 May will be rollover in full considering demand and market conditions, and mentioned that if needed they can intervene using all available FX instruments”.
Key Quotes
“To estimate BRL valuation against the USD, we assess whether the USD move this year constitutes convergence to a stronger fundamental equilibrium”.
“If it does, USDBRL equilibrium would be at 3.44. If the USD bounce proves cyclical, it would be at 3.17”.
“We revise our 2015 eop BRL forecast to 3.40 from 3.00 and 2016’s to 3.60 from 3.10”.
“Also, the BCB decided not to extend the FX swap program that was scheduled to come to an end at the end of March, as expected. The BCB announced that the FX swaps that mature on 1 May will be rollover in full considering demand and market conditions, and mentioned that if needed they can intervene using all available FX instruments”.