The Brazilian Real gained significantly after the presidential elections, which were won by the leftist Lula da Silva. Although USDBRL could retrace further, economists at Commerzbank remain cautious and expect the pair to hold above the 5.00 level.

Hope dies last

“It cannot be ruled out that the BRL could gain again if news, for example, about the appointment of cabinet members who are adequate from the market's point of view, give the FX market renewed hope that the new government will not put so much strain on public finances. Hope dies last, after all.”

“We remain cautious and believe that USDBRL should remain above the 5.00 mark for the time being.”