Brazilian Real: How Will Politics Shape Its Post-Ambush Course? – Societe Generale

Heavy selling has left the Brazilian Real under severe pressure, with trading set to resume at 5.4155 following an 8.5% decline as long positions were unwound, according to Societe Generale strategists. The next finance minister’s appointment and the fiscal policy stance will be crucial, they emphasise. On the technical front, the pair has revisited the July 2025 high around 5.60/5.63, an interim hurdle, while March support levels stand at 5.34 and 5.24.

How will BRL reopen following the steep sell-off?

"In EM, it was all about Brazil yesterday after the ambush of the currency, bonds, soft commodities and stocks."

"The BRL will resume trading at 5.4155 after nosediving 8.5% following the unwinding of long positions."

"Where the currency goes from here will be partly decided by the appointment of the next finance minister and the direction of fiscal policy."

"Inflation data for October is due on Thursday. The BCB meets next week."

"Technically, the pair has retested the July 2025 high near 5.60/5.63, which could act as an interim hurdle; March high at 5.34 and 5.24 are short-term supports."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)