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TD Securities sees USD/BRL easing below 5.00, eyes 4.60

The firm links its bias to Brazil’s tight first-round election outcome, arguing it reduces near-term political risk for the real.

Reported · Written up by our desk · Major Pairs

TD Securities said the Brazilian real has a constructive backdrop, citing diversified commodity exposure and strong carry, and it highlighted an election-driven political tailwind for USD/BRL.

In its short term fair value model, the bank puts USD/BRL near 5.00 excluding political risk, while it favors the pair moving below 5.00 toward 4.60 over the longer term.

FXStreet reported that TD Securities pointed to a narrow first round election result and a center-right skew in remaining votes as support for President Jair Bolsonaro.

The bank also said the Round 1 result removes a near term hurdle, reinforcing what it described as a broader rightward shift in Latin America, and it would buy BRL on USD/BRL spikes.

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