BRL/USD Reaching 0.20 by Q3 - A Long Shot?

asked by u/cerny_natalia · 5d · 2 answers

Been looking at the $BRLUSD cross lately, currently hovering around 0.1928. There's been a bit of chatter about a potential push towards the 0.20 level, and I wanted to put some thoughts down on the likelihood of that happening by the end of Q3.

My take, it's a long shot, probably around a 30% probability at best. The central bank here has shown a pretty consistent stance on intervention when things get too volatile, and the commodity story, while still present, isn't providing the same tailwind it once did. Domestic fiscal concerns continue to bubble under the surface, which tends to keep a lid on any sustained appreciation. While a temporary overshoot above 0.195 is certainly plausible given daily fluctuations, holding 0.20 for any meaningful period seems to require a more significant shift in underlying fundamentals or a dramatic change in global risk appetite that isn't immediately apparent. The current range feels somewhat established for now, and any breakout would likely be met with resistance, both structural and from policymakers. Just my two cents, not a forecast to trade on, obviously.

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  • u/brandonlee· 1 pts· 5d

    I'd agree it's a long shot, mainly due to the central bank's consistent intervention. They've shown a clear line in the sand, and 0.20 would likely trigger a strong response. Not enough catalysts to push it through that, in my opinion.

  • u/hferrari· 1 pts· 5d

    A 30% probability feels optimistic, given how often central banks seem to enjoy keeping everyone on their toes. I wouldn't bet my lunch money on it, but then again, my lunch money isn't what it used to be.

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