Brazilian Real: Post-ambush path tied to politics – Societe Generale

Societe Generale strategists highlight severe pressure on the Brazilian Real, which will resume trading at 5.4155 after an 8.5% drop driven by unwinding of long positions. They note the pair has retested the July 2025 high near 5.60/5.63 as an interim hurdle, with March supports at 5.34 and 5.24, and stress that the next finance minister and fiscal stance will be crucial.

BRL reopens after sharp selloff

"In EM, it was all about Brazil yesterday after the ambush of the currency, bonds, soft commodities and stocks."

"The BRL will resume trading at 5.4155 after nosediving 8.5% following the unwinding of long positions."

"Where the currency goes from here will be partly decided by the appointment of the next finance minister and the direction of fiscal policy."

"Inflation data for October is due on Thursday. The BCB meets next week."

"Technically, the pair has retested the July 2025 high near 5.60/5.63, which could act as an interim hurdle; March high at 5.34 and 5.24 are short-term supports."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)