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Why Brazil’s real could hold on to its recent gains

Given the extent of its rally over the past couple of months it’s difficult to make the case that the Brazilian real will now strengthen much further from here. But by the same token, we think there is a reasonable chance that the currency will hold on to its recent gains and are revising our end-16 forecast to 3.25/$ and our end-17 forecast to 3.00/$. Both are stronger than the consensus currently expects.

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