Economists at Credit Suisse stick to their 5.00-5.50 Q4 target range for USD/BRL following Lula’s runoff vote victory.

Risks of asymmetric expectations around cabinet selections

“We stick to our 5.00-5.50 Q4 target range for USD/BRL.” 

“With the contested election risk premium seemingly priced out, we now see risks of asymmetric expectations around Lula cabinet selection. In absence of a broad turn in the USD outlook, this argues against a lasting USD/BRL break below 5.00 until more clarity on policy and personnel is reached.”