FXStreet (Edinburgh) - In the view of BofA Merrill Lynch Global Research, the bearish tone is set to remain around the Brazilian currency. Key Quotes “Disappointing growth will likely lead to an easier Brazilian Central Bank and the market is now pricing in 185bp of hikes by the end of 2016”. “We remain bearish BRL and like buying USD on dips, as the political uncertainty will likely continue. We forecast the BRL at 4.1 in 2015 and at 4.5 in 2016”. “We now anticipate the recession to intensify and last longer, with activity not starting to recover until late 2016. We still expect GDP to contract 3.3% in 2015, but we revised our GDP forecast for 2016 to -3.5% from -1.4%”. “We believe the government will face serious challenges in passing fiscal measures in Congress, as political noise remains high. This increases the uncertainty about the timing of a rebound in confidence levels and inhibits investments for a longer period of time”. “In addition, purchasing power should decline further given high inflation, a loosening labor market, a tighter credit market and higher taxes”. For more information, read our latest forex news.