Real to defend current strong levels vs. the US Dollar for the time being – Commerzbank

Economists at Commerzbank analyze the Brazilian Real outlook.

Strong growth supports the Brazilian Real

With a plus of 1.9% QoQ the Brazilian economy grew much more significantly at the start of the year than expected (consensus: +1.2%). This was mainly due to the strong agricultural sector.

We assume that the BCB is likely to remain cautious regarding rate cuts following yesterday’s data, and we therefore continue to expect that for the time being the Real will be able to defend current strong levels vs. the US Dollar.