USDBRL Forecast: Brazil Inflation Rate Drops


FxNews USDBRL forecast – The currency pair has stabilized its price above the 23.6% Fibonacci support level, indicating a bullish momentum. This is particularly evident in the USDBRL price movement within the flag pattern. Additionally, the RSI indicator is approaching the median line, further supporting the upward trend. Complementing these indicators, the Awesome Oscillator bars are predominantly green. These indicators signaling strength in the current bullish wave that began on November 16. The bullish wave has the potential to extend towards the 38.2% Fibonacci resistance level.

However, this bullish outlook could be negated if the bears manage to push the price below the 23.6% level.

USDBRL Forecast

USDBRL Forecast – Daily Chart

Brazil Inflation Rate Drops Again

Bloomberg – In November 2023, Brazil Inflation Rate witnessed a decrease, dropping to 4.68% from the 4.82% recorded in the previous month. This change closely aligns with market expectations, which had forecasted an inflation rate of around 4.7%. This marks a continuation of the slowing inflation trend that began after reaching a seven-month high in September. Notably, this reduction brings the headline inflation rate closer to the upper limit of the central bank’s target range, which stands at 4.75%.

Economic Implications

This decrease in inflation is seen as a positive sign for Brazil’s economy, as it suggests a stabilization of prices, making it more manageable for consumers and businesses. The central bank is likely to consider this trend in its upcoming meeting, potentially extending its cycle of cutting interest rates to stimulate economic growth.

In terms of specific categories, transportation costs saw a notable slowdown, dropping from 7.44% in October to 6.85% in November. This was largely influenced by the reduction in oil prices during the period, which consequently lowered motor fuel inflation from 13.27% to 7.93%. Although food and beverage prices saw a slight increase, from 0.48% to 0.57%, they remain below the year’s peak levels. Housing and utility costs remained relatively stable.

On a monthly basis, consumer prices experienced a marginal increase of 0.28%.

  • 12 December 2023
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