Rabobank analysts Mauricio Une and Renan Alves report that the Brazilian Real appreciated 1.26% against the US Dollar over the past week, with USD/BRL trading around 5.13. However, they point to the interest rate differential between Brazil and the US as a factor that could lead to further weakness for the Real. The analysts suggest that the current rate gap may not be sufficient to support the currency, potentially driving it lower against the Dollar in the near term.
Rabobank notes the rate differential may not support the Real, signaling potential weakness vs Dollar.
