The Brazilian real traded around 5.6 per USD in late November, getting closer to a 3-week low of 5.61 hit on November 19th, amid a general flight to safety after a new coronavirus strain was discovered in South Africa, raising concerns of further global lockdowns and restrictions that would weigh on the economic recovery. Meanwhile, the odds are rising that the central bank will raise rates by more than 150 bps in the next meeting amid hotter-than-expected inflation for mid-November. Traders also await the negotiations around the Proposal for Amendment to the Constitution (PEC) of the Precatórios in the Federal Senate. The proposal allows the government to spend an additional BRL 92 billion, making it possible to accommodate the new welfare program “Auxilio Brasil”. The new bill raises concerns over the sustainability of fiscal spending and may lift inflation further but its rejection could lead to an even more uncertain fiscal plan.
Historically, the Brazilian Real reached an all time high of 5.99 in May of 2020. Brazilian Real - data, forecasts, historical chart - was last updated on November of 2021.
The Brazilian Real is expected to trade at 5.68 by the end of this quarter, according to Trading Economics global macro models and analysts expectations. Looking forward, we estimate it to trade at 5.92 in 12 months time.