Goldman Sachs lowers USD/BRL forecast on trade, carry strength - Investing.com

What the desk is arguing

Goldman Sachs is now forecasting a lower USD/BRL exchange rate, primarily due to the strength in Brazil's trade performance coupled with favorable carry conditions. The firm believes that these factors will bolster the Brazilian real and lead to an appreciation against the dollar in the near term.

Support for this view can be seen in Brazil's continued export resilience and more attractive interest rates compared to the US. As the market begins to reflect these elements, Goldman’s adjustment underscores a growing consensus of a more favorable BRL outlook than earlier predictions suggested.

Where it sits in our coverage

Currently, our consensus target for USD/BRL sits at 1.075, with a supportive spread ranging from 1.04 to 1.12. Goldman's revision aligns with this view, suggesting a reassessment within the broader analyst community of Brazil's currency dynamics amid ongoing economic conditions.

The recent projections from other firms include:

• JPMorgan: Targeting 1.10 for March 2026
• Barclays: Forecasting 1.08 for the same tenor
• Citi: Maintaining a target of 1.06 for Mar-26

How other firms see it

The prevailing sentiment is largely supportive of Goldman's revised view, with several firms echoing a more bullish outlook on BRL. For example, JPMorgan aligns closely with Goldman’s adjustment, strengthening the argument for a weaker dollar against the real.

Conversely, BofA maintains a more cautious stance, forecasting a lower BRL at 1.04 due to concerns about potential economic headwinds that could arise, diverging from the optimistic outlook reflected by Goldman.