Overview

• The commercial dollar traded around R$5.34 on Oct. 5 after a week within R$5.31–R$5.36, leaving the dollar down about 13.5% against the real this year.
• HSBC cut its year-end dollar forecast to R$5.40, while Barclays, Goldman Sachs, and Société Générale project around R$5.20, and Bradesco lowered its call to R$5.25.
• Bradesco’s chief economist Fernando Honorato Barbosa said he sees the dollar nearer R$5, or slightly below, within six to nine months rather than at R$5.50.
• Strategists cite a weaker global dollar and Brazil’s high interest-rate differential as key supports, with expectations for Fed rate cuts reinforcing the carry trade.
• Risks flagged include fiscal concerns, seasonal outflows from profit and dividend remittances, and politics, with Santander keeping a more cautious R$5.60 view and HSBC noting sensitivity to changes in President Lula’s approval.