Little reason is seen to believe that BRL depreciating trend is over. Brazil economic activity continues to collapse and political commitment to push forth the necessary structural reforms remains lacking.
As such, further cheapness in BRL compared with the BEER model (17% cheap as of now) looks warranted until a meaningful leadership reshuffle of thecurrent administration takes place.
"Rising term premia due to fiscal concerns coupled with increasing market value of liabilities arising from a weak BRL pose nonnegligible risks to a sudden stop in the months to come", says Barclays.
These add to negative global factors of weak China growth, commodity prices and Fed tightening.
"Remaining long USD/BRL through a three-month call spread is recommended", added Barclays.


Gordie Howe International Bridge Set to Open, Boosting U.S.-Canada Trade Links
US Dollar Edges Higher as Inflation Data and Middle East Tensions Shape Market Sentiment
Asian Stocks Slide, Oil Prices Climb as Middle East Tensions and Inflation Fears Shake Markets in 2026
Changchun Targets EV Growth as China’s Auto Industry Consolidation Accelerates
Gold Prices Drop as Strong Dollar, Rising U.S.-Iran Tensions Weigh on Market Sentiment
BOJ Rate Hike Expectations Rise as Weak Yen and Strong U.S. Jobs Data Increase Pressure
Oil Prices Rise as Iran-Israel Tensions Ease Following Trump-Led Ceasefire Push
Asian Currencies Gain as U.S. Dollar Softens Ahead of Key Inflation Data in 2026
Gold Prices Fall Amid Rate Jitters; Copper Steady as China Stimulus Eyed
Wall Street Rebounds as Chip Stocks Rally and Iran-Israel Tensions Ease 



