The GBP to BRL exchange rate has recently seen significant fluctuations, with the pound (GBP) ending July at notable lows, recording its worst monthly performance in nearly two years. Analysts attribute this decline to concerns regarding the UK's fiscal health, exacerbated by lackluster economic data and policy setbacks. The risk of further contraction in the manufacturing sector could weigh on the pound as traders anticipate the release of July’s finalized manufacturing PMI.
Amidst this backdrop, the British pound's performance is influenced by several domestic and international factors. The imposition of a 10% tariff on UK goods by the US has added to the negative sentiment surrounding the currency. Furthermore, the policies of the Bank of England (BoE), along with upcoming decisions on interest rates and inflation data, will be crucial in shaping GBP’s trajectory. Political events, particularly those linked to Brexit and trade agreements, continue to inject volatility into the currency.
Conversely, the Brazilian Real (BRL), primarily driven by commodity prices such as oil and soybeans, faces its own set of challenges. Recent data shows that BRL is under pressure due to a similar 10% reciprocal tariff imposed by the US. Despite these external pressures, the Real has been somewhat supported by rising oil prices, with Brent Crude OIL/USD trading at $69.67, which is above its three-month average of $67.98.
Currently, the GBP to BRL exchange rate is at a 90-day low of 7.3599, reflecting a 2.0% decrease from its three-month average of 7.5126. The range over the last 90 days has been relatively stable, fluctuating between 7.3599 and 7.7087. Such dynamics indicate ongoing challenges facing both currencies, influenced by international trade tensions and localized economic indicators. Analysts suggest that both the pound and the Real will remain sensitive to political developments, commodity price fluctuations, and broader economic sentiments in the coming weeks.