USD/BRL retested the 5.0000 level during the second half of January. Economists at CIBC Capital Markets analyze the pair’s outlook.

USD/BRL unlikely to surpass the 5.2000 level in the coming months

A USD/BRL break above the 5.0000 mark would suggest a retest of the 5.0500-5.1000 range last seen in October/early November.

We point out that barring a new external shock, the benevolent trend of the country’s trade balance is likely to prevent an upward move beyond the 5.2000 level in the coming months.