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Robin Brooks suggests that if Bolsonaro wins the election, the Brazilian Real could rapidly strengthen to $/BRL 4.80. He notes that in the first half of 2022, $/BRL nearly reached his long-standing fair value estimate of 4.50, but this momentum faded in the second half of 2022 as the odds shifted toward a Lula victory.
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Robin Brooks has previously highlighted challenges for policymakers during periods of bond market turbulence, noting that a hawkish stance may be needed to anchor yields in his report on the bond market sell-off. He has also discussed Bitcoin's rally versus other safe haven assets following dovish Federal Reserve signals, as detailed in his analysis of Bitcoin outperforming other safe havens. Brooks continues to assess major market reactions to shifting policy and election outcomes.