USD/BRL eases after Brazilian central bank intervention

By FXStreet FXStreet (Córdoba) – The Brazilian real is rising against the US dollar for the second day in a row boosted after the Central Bank of Brazil announced an intervention in the market in order to support the local currency, that since the beginning of the month lost 10%.

USD/BRL reached last week a 13-year high at 3.86 and currently is trading at 3.80. Earlier bottomed at 3.768 but then rebounded as US stocks erased gains and while greenback strengthened versus commodity currencies. BRL, COP and NZD are among the top performers today in the forex market.

Despite recovering today the real remains near multi-year lows and still facing bearish pressure. The acceleration of the depreciation increased the difficulties for the central bank to lower inflation.

The annual rate is at 9.56%. Tomorrow a new report on prices will be release and is expected to show inflation around the previous levels. Also the minutes of the latest meeting of the central bank will be published. At that meeting, they left the interest rate unchanged, after raising it since October to 14.25%. “With price pressures and inflation expectations still high and rising, we are skeptical that the tightening cycle has ended”, …read more

Source:: FX Street