Rabobank Sees Brazilian Real Weakening to BRL 5.35 by Year-End

Rabobank's strategists Mauricio Une and Renan Alves note that tensions between the US and Iran have eased slightly, but the outlook for global energy and markets remains highly uncertain. Brent Oil prices approached $100 per barrel, while the US Dollar ended last week at BRL 5.0831.

The Brazilian Real saw a 0.56% appreciation against the dollar during the week, its seventh-best performance among 24 emerging-market currencies. Given expectations of narrowing interest-rate differentials and Brazil's fragile fiscal backdrop, Rabobank projects USD/BRL at 5.35 by year-end.