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More forceful FX intervention brings the Credit Suisse analyst team to lower the upper end of the USD/BRL range from 5.60 to 5.50, looking for the pair to trade between 5.25 and 5.50 in the near-term.

Key quotes

“We remain open to taking a more cautiously constructive BRL stance if we were to see convincing signals that both fiscal and monetary policy tightening expectations will be realized. For the time being, however, we think that clarity on the topic will be low, and noise will be high. This leaves us still looking for USD/BRL trading in a range in the near-term.”

“We look to lower the upper end of our USD/BRL range from 5.60 to 5.50, which leaves us looking for a tighter 5.25-5.50 USD/BRL range.”