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Rabobank sees USD/BRL sliding toward 5.35 by year-end
Rabobank cited narrowing Brazil versus advanced economy rate differentials and Brazil’s fragile fiscal backdrop, projecting USD/BRL at 5.35 by year-end after USD ended the week at BRL 5.0831.
Rabobank strategists Mauricio Une and Renan Alves said the Brazilian real could weaken less than expected into year-end, despite ongoing uncertainty around global energy and markets. They pointed to a slight easing in US-Iran tensions after a pause in hostilities, but noted that the overall outlook remains highly uncertain.
FXStreet reported that Brent oil again approached US$100, while the US dollar ended last week at BRL 5.0831. Rabobank projected USD/BRL at 5.35 by year-end, citing narrowing rate differentials between Brazil and advanced economies through 2026.
The strategists also linked their forecast to expectations for a potentially stronger US dollar globally alongside Brazil’s fragile fiscal backdrop, and they added that an election year could factor into dynamics for the currency. They said the BRL’s week performance implied a 0.56% appreciation versus the dollar, one of the better showings among emerging-market currencies tracked by Rabobank.
Rabobank’s FX view was presented alongside broader market notes that highlighted shifting expectations ahead of upcoming central bank events, including the Fed and the BoE. FXStreet said optimism around a potential US-Iran deal and caution ahead of the FOMC were weighing on currency moves, while gold remained under downside pressure with the US dollar only modestly lower.
Latest closeGold $4,023.80 ▼1.2%|Brent $85.92 ▼2.8%