USD/BRL will continue to move higher in the following days

The pair will continue to move higher in the following days to reach its all-time high. The US trade deficit with China falls in 2019, its first time in six (6) years. Yesterday, February 05, the Commerce Department said deficit slips by 1.7%. Imports tumbled 1.7% while exports decrease by 1.3%. The curb in trades were amid the trade war between the two (2) largest economies and Trump’s “America First” policy. On December 14, the two (2) countries began to de-escalate their trade war by signing the phase one trade deal. Under the deal, China will need to increase its import of US agricultural products to a total of $40 billion annually. This will be catastrophic for Brazil who benefited during the heights of trade war. Before the phase one trade deal, Brazil accounts for 80% of total Chinese soybean imports. The deal already outshines the report published by Brazil. The country said its soybean output increased by 8% from the previous year.