We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies.
You can learn more about our cookie policy here, or by following the link at the bottom of any page on our site.

Free Trading Guides
EUR/USD
Mixed
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
GBP/USD
Bearish
USD/JPY
Bullish
Gold
Bullish
Oil - US Crude
Bullish
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
Bitcoin
Mixed
More View more
Real Time News
  • Growth linked currencies have gained as investors hope for progress on the trade front as well as stimulus from the Fed. The global economy however remains depressed and seems likely to remain so. Get your market update from @DavidCottleFX here: https://t.co/jt1HH9AHLM https://t.co/Yz65AMJYlm
  • RT @YuanTalks: #China temporarily suspend additional tariffs of either 10% or 5% on some #US goods scheduled to take effect on Dec 15, said…
  • The gold-silver ratio is simple. It is the number of silver ounces you would need to trade to receive one ounce of #gold at current market prices. Find out how you can use this in your trading strategy here:https://t.co/kh5DZvv5ib $XAUUSD https://t.co/eJGODpfTNc
  • How can traders avoid #FOMO in trading? Start by implementing a well-heeled plan taking only four hours per week. Get your insight from @JStanleyFX here: https://t.co/vwUShQPc27 https://t.co/DoVBd1l1oO
  • #Silver is a precious metal commodity that investors use as an inflation hedge and safe-haven asset. Find out what are some strategies and tips to trade silver here: https://t.co/k4tVcFuwxW #CommoditieswithDailyFX https://t.co/zXCSmH2HLX
  • Markets are trying to maintain a bullish tilt as a new week rolls around, a look ahead at the charts of the #Dow, #DAX, and #FTSE. Get your technical analysis on major world indices from @PaulRobinsonFX here: https://t.co/bYjRDvQsdM https://t.co/mbg0rUbv3K
  • Trade conflict is clearly awful for the broad world economy, but some countries are already benefiting from it. More stand to do so. Spotting them early could be profitable. Get your update on the #tradewar from @DavidCottleFX here: https://t.co/og0VAPAqwm https://t.co/xB8hYUj4OA
  • #Gold prices may suffer if better-than-expected US economic data and progress on US-China trade negotiations cool 2020 Fed rate cuts and alleviate demand for anti-fiat hedges. Get your $XAUUSD market update from @ZabelinDimitri here: https://t.co/3ula2sUpqL $gld https://t.co/2iZwxcm3wP
  • What's the difference between leading and lagging indicators? Find out from @RichardSnowFX here:https://t.co/vGx8HCagF5 https://t.co/KCZ48rDnhy
  • Why financial market traders must monitor both monetary and fiscal policy? Find out from @MartinSEssex here: https://t.co/Fkzk88Y5gm https://t.co/tTXcw1b7Tp
USD/BRL Forecast: Brazil Markets Eye Selic Rate, Pension Reforms

USD/BRL Forecast: Brazil Markets Eye Selic Rate, Pension Reforms

2019-05-07 23:00:00
Dimitri Zabelin, Junior Currency Analyst
Share:

TALKING POINTS – SELIC RATE, USD/BRL, PENSION REFORM

  • USD/BRL, Ibovespa eyeing Selic rate decision
  • Economists are expecting hold at 6.50 percent
  • What is driving Brazilian monetary policy?

See our free guide to learn how to use economic news in your trading strategy!

Tomorrow, Banco Central do Brazil will be announcing its decision on whether it will adjust the benchmark Selic rate. The decision by the nine-committee council – known as Copom – will be released on May 8 at 21:00 GMT. Since April 2018, the central bank has held rates at 6.50 percent following a series of deep cuts in 2017 that were used as a way to stimulate growth after the country endured a recession.

Analysts are expecting for officials to keep interest rates at this all-time low until there are clear signs that President Jair Bolsonaro’s pension reforms are able to survive in the legislature. Later today, the president of the lower house’s special commission will announce a schedule for the debates. This follows last month’s landmark decision to declare that the pension reforms were constitutionally legal.

Similar to how the BoE is guiding its policy around the outcome of Brexit, the Brazilian central bank is holding on any rate adjustments until there is further clarity on pensions policy. To read more about why progress on these reforms is driving Brazilian financial markets and influencing local monetary policy, read my updated BRL and Ibovespa outlook here.

However, the Brazilian central bank finds itself at a cross roads. Economic indicators have been broadly underperforming relative to economists’ expectations, with last week’s industrial production data missing estimates. That might imply broader implications for global growth, preceding the recent deterioration in US-China trade relations.

The probability of another Brazilian recession will likely rise if the pension reforms are not passed this year, making the market impact of each development that much greater. Volatility is likely to be amplified as the clocks runs out. You may follow me on Twitter @Zabelin.Dimitri for updates on the pension reforms and the reaction in local assets.

Selic Rate Decisions 2017-2019

Chart Showing Central Bank Rate Cuts

FX TRADING RESOURCES

--- Written by Dimitri Zabelin, Jr Currency Analyst for DailyFX.com

To contact Dimitri, use the comments section below or @ZabelinDimitrion Twitter

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

DISCLOSURES

News & Analysis at your fingertips.