Members login
Forex - Brazil FX Flows! - Getting some support from equities rebound but upside limited at 1.735
Written by article default Wednesday, 17 November 2010 13:04
Some of the usual opportunity buying after a strong loss in equity market is helping Latam FX to recover some of yesterday losses. BRL is back 0.35% to 1.7356 but movement is hesitant as EUR is yet to improve remaining below 1.35 as peripheral Europe debt remains a concern. Inflation data is mixed but the dominant impact is for higher expectation and after a initial reduction in Di rates, they are again on the rise with Jan 12 at 11.61% and Jan 13 at 12.11%. If EUR cannot make a move above 1.35 we amy face again the risk of long BRL position being dismantled. Understandably BCB has reduced intervention to 1 auction per day and we expect same behaviour as long as BRL remains above 1.72.