USD/BRL, which rallied from around 5.50 to around the 5.75 level last week, hit highs in the 5.80s on Monday. Higher US yields plus Brazilian government shutdown concerns are being touted as weighing on BRL. USD/BRL, which rallied from around 5.50 to around the 5.75 level last week, has picked up where it left things off and continued to grind higher on Monday, reaching peaks above the 5.80 level during US trading hours. The pair is now only about 1.7% from its monthly highs in the upper 5.80s; note that a 1.7% move in one day would be far from extraordinary in BRL, with USD/BRL amongst the more volatile of the USD/EMFX majors. Driving the day Rising US government bond yields has not been helpful for EM currencies over the past few weeks, BRL included, so as long as US yields keep trucking higher, risks for USD/BRL remain tilted towards further gains. In that regard, Biden’s infrastructure package announcement on Wednesday will be of importance – if expectations are for a greater amount of borrowing, this will put upwards pressure on yields. Note a number of domestic factors are also being cited as driving recent depreciation in the Brazilian real. The budget that was announced last Thursday has been labelled as “unfeasible” by economy minister Paulo Guedes and likely to result in a government shutdown before the end of the year; according to analysts, the budget would force the government have to function on not even half of what experts consider the minimum level to avoid a shutdown. Elsewhere in Brazil, the Bolsonaro administration continues to face challenges with the defence minister tendering his resignation and the foreign minister also touted to be on the verge of tendered theirs. Looking ahead, the aforementioned announcement from Biden will be a key event, but so will US data in the form of the March ISM manufacturing survey on Thursday and the March labour market report on Friday. Out of Brazil, February budget data out on Wednesday will be of note, as will February Industrial Output and March trade data, both out on Thursday. FX Street FX Street FXStreet is the leading independent portal dedicated to the Foreign Exchange (Forex) market. It was launched in 2000 and the portal has always been proud of their unyielding commitment to provide objective and unbiased information, to enable their users to take better and more confident decisions. View All Post By FX Street FXStreet News share Read Next BOJ’s Kuroda: No plan to change 2% inflation target FX Street 1 year USD/BRL, which rallied from around 5.50 to around the 5.75 level last week, hit highs in the 5.80s on Monday. Higher US yields plus Brazilian government shutdown concerns are being touted as weighing on BRL. USD/BRL, which rallied from around 5.50 to around the 5.75 level last week, has picked up where it left things off and continued to grind higher on Monday, reaching peaks above the 5.80 level during US trading hours. The pair is now only about 1.7% from its monthly highs in the upper 5.80s; note that a 1.7% move in one day would be far from… Regulated Forex Brokers All Brokers Sponsored Brokers Broker Benefits Min Deposit Score Visit Broker 1 $100T&Cs Apply 0% Commission and No stamp DutyRegulated by US,UK & International StockCopy Successfull Traders 9.8 Visit Site FreeBets Reviews$100Your capital is at risk. 2 T&Cs Apply 9.8 Visit Site FreeBets Reviews$100Your capital is at risk. 3 Recommended Broker $100T&Cs Apply No deposit or withdrawal feesTrade major forex pairs such as EUR/USD with leverage up to 30:1 and tight spreads of 0.9 pips Low $100 minimum deposit to open a trading account 9 Visit Site FreeBets ReviewsYour capital is at risk. 4 T&Cs Apply Visit Site FreeBets ReviewsYour capital is at risk. 5 Recommended Broker $0T&Cs Apply Trade gold, silver, and platinum directly against major currenciesUp to 1:500 leverage for forex trading24/5 customer service by phone and email 9 Visit Site FreeBets ReviewsYour capital is at risk.