USD/BRL: the Real is rising a day after the dramatic collapse

FXStreet – The Brazilian Real went on Friday, a day after the dramatic collapse, recovery rate, volatility is still high and likely to remain so, but the mood in the market of today is different than yesterday’s.

The currency pair USD/BRL falls more than 2 percent and was last updated to 3.28, according to 3.40 yesterday. Two days ago, the Brazilian currency was quoted to 3.10. The San Pablo’s Bovespa Index increased by 2,80%.

The accusation that President Michel Temer to have authorized bribes, and caused a sales storm around Brazilian assets.

The political uncertainty is the shot in the follow up and it is not currently clear whether Temer will remain in office. Yesterday, he said: “I’m not going to resign”. The next elections will be held until the end of 2018.

“The perspective for the Brazilian Real is likely to depend in particular on whether the President can negate the allegations in the next few days,” wrote the market analysts of Danske Bank.

According to them, the Opposition is likely to push safety to a cancellation Temers or bringing impeachment proceedings against him.

“The political turmoil in Brazil provide upside risks to our forecast for USD/BRL”, said the Danske Bank market analysts.

** FXStreet News Editorial, FXStreet**

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