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23 Apr 2013
Forex Flash: Markets looking for clues on Brazil´s tightening cycle - BBH
FXstreet.com (Barcelona) - Brown Brothers Harriman analysts note that Brazil´s COPOM minutes are due out Thursday and markets will be looking for clues on the timing and magnitude of the tightening cycle.
They feel that it will also be interesting to see if the dovishness implied by the statement and the dissent is confirmed by the minutes. After initial BRL weakness on Thursday after the Wednesday decision to hike rates by 25 bp, the currency was able to regain some ground against the dollar to end the week near 2.01. They write, “We think the real could return to below 2.00 in the coming weeks if markets settle down, and we believe that the 1.95-2.05 trading range remains intact.”
They feel that it will also be interesting to see if the dovishness implied by the statement and the dissent is confirmed by the minutes. After initial BRL weakness on Thursday after the Wednesday decision to hike rates by 25 bp, the currency was able to regain some ground against the dollar to end the week near 2.01. They write, “We think the real could return to below 2.00 in the coming weeks if markets settle down, and we believe that the 1.95-2.05 trading range remains intact.”