BCB's verbal intervention already ineffective

Thursday's verbal intervention from the Brazilian central bank (BCB) has already proven ineffective. USD-BRL is back at levels above 4.10 which illustrates that already markets are beginning to doubt whether BCB have either the willingness or the wherewithall to intervene meaningfully to support BRL. 

"We hold the view that BCB will have to hike rates and intervene in order to cease BRL's constant depreciation. As things stand, we have yet to see BCB back up their words with tangible actions. In the meantime we have to expect that markets will once again test the willingness of BCB to step in and defend BRL, so we expect choppy trading in spot rates and the still elevated volatility profile to persist", says Commerzbank in a report on Tuesday.