Morgan Stanley
2026 FX Outlook: The Year of Pivots
LIVE20 November 2025USD bearish
Back to CurrenciesModerately Bullish
USD/BRL
BRL to appreciate modestly on high carry and improving primary balance, but Octo
MS Forecast Path
Cross-Firm Forecast Comparison
Key Drivers
Presidential elections Oct
Carry appeal
Fiscal reforms
BCB rate path
Commodity exports
All Firm Targets (Dec '26)
JPMBullish5.55
GSBullish5.20
ING5.20
BARCNeutral5.20
MUFGModerately Bullish5.15
MSModerately Bullish5.10
BofAModerately Bullish5.10
DBBullish5.05
Analysis Summary
BRL to appreciate modestly on high carry and improving primary balance, but October elections create volatility. Prefer options-based exposure. USD/BRL to reach 5.10 if reform agenda holds.