More Real Appreciation In Store

July 2008 | Market Strategy

Underpinned by aggressive monetary tightening and sound macroeconomic fundamentals, Brazil's real continues to power on, posting multi-year highs against an array of currencies. Although the fundamentals driving the real remain strong, we caution that hot money-driven BRL appreciation may see the current account deficit widen further, making the currency increasingly susceptible to a harsh pullback.

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