BofA Bullish on Brazil Real, Shorts EUR/BRL

Bank of America opened a short EUR/BRL position at 5.80, citing improved Brazil terms of trade and rising real rates.
Higher oil and agricultural prices boost exports 10‑20% YoY, projecting an $11 billion improvement in Brazil’s 2026 external balance.
Central bank’s cautious stance pushes nominal rates above inflation, giving Brazil one of the highest and fastest‑rising forward real rates in EM.
Despite a 13% rally, the real is still about 7% undervalued in trade‑weighted terms, and BofA sees a firmer currency as macro‑consistent.