[Rocky Thomas]

Wells Fargo reported Friday in its International Commentary that it “retains a modest degree of short-term optimism for the Brazilian real, but has become materially more pessimistic on the long-term outlook for the currency. External factors—such as a less dovish Fed and their view for worsening sentiment toward China—should contribute to a weaker Brazilian currency; however, the intersection of local politics and fiscal policy should be the driving force of BRL underperformance in 2025 and 2026. Local elections reveal that momentum behind Lula is fading, which Wells Fargo believes will lead to aggressive fiscal resource deployment from the current administration in an effort to gather support ahead of 2026 presidential and congressional elections. While near-term headlines may indicate that Lula is attempting to exercise fiscal discipline, Wells Fargo ultimately believes those efforts will prove to be insufficient, temporary, and not enough to change the fiscal narrative in Brazil. They believe that these fiscal concerns will be reflected in a Brazilian real that consistently hits new lows against the U.S. dollar over the course of 2025 and into 2026.”  The full report can be found at: https://wellsfargo.bluematrix.com/links2/html/3a354f0f-4cdd-4644-bdb6-75c3bec4e43d</span>

• This topic was modified 1 month, 2 weeks ago by Rocky CICP.
• This topic was modified 1 month, 2 weeks ago by Rocky CICP.

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