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Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
BRAZIL
- The firm momentum on the US Dollar since June has been weighing on a range of EM FX currencies, particularly the BRL.
- The BRL has been the third weakest performer this month (after TRY and HUF) among the EM world, down nearly 5% against the USD.
- Even though the BCB has embarked into an 'aggressive' tightening cycle, raising the Selic rate by 425bps this year, the elevated political uncertainty combined with the rising inflationary pressures (CPI inflation close to 10% in Brazil) have been weighing significantly on the real.
- This chart shows that the BRL weakness has also been negative for equities, with Ibovespa index down over 15% since its June peak.
- Hence, further USD strength as the Fed taper nears could continue to weigh on Brazilian risky assets in the near term.
Source: Bloomberg/MNI
Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
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