The Brazilian Real, which posted the best quarterly performance since it
was introduced 15 years ago, is set to prolong its rally, as former
central banker bets on the South American economy ability to rebound
quickly, spurring demand for the national currency.
Among the 16 most traded currencies on
markets, the Brazilian real was the second best performing, gaining 19
percent against the U.S. dollar, losing only to the South African rand,
which has gained 23 percent in the first quarter. Luiz Fernando
Figueiredo, a former Brazilian central bank President, affirmed that the
Brazilian currency is set to continue its rally against currencies like
the dollar and the euro, as multiple factors are likely to push the
attractiveness of the real, like the commodities price rebound, and the
Brazilian economy, which has been stimulated by a number of interest
rate cuts since the first semester of the current year.
Economists
are not so optimistic as Figueiredo towards the current real’s
situation, even if there are several reasons to believe that the real
will not lose against the main currencies during the following months,
its hard to determine whether the rally will continue to perform as
significantly as it has been in the first quarter, since the Brazilian
economy has also been struggling with the effects of the global slump.
USD/BRL rose slightly to 1.9525 as of 12:32 GMT from a previous rate of 1.9578.
If
you want to comment on the Brazilian real’s recent action or have any
questions regarding this currency, please, feel free to reply below.
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