BRL Under Duress, Local Debt Attractive

October 2008 | Market Strategy

Falling commodity prices and the ongoing global financial meltdown saw the Brazilian real fall through the key psychological BRL2.0000/US$ level on October 2. From a technical perspective, there now appears to be little stopping further depreciation of the currency against the US dollar. Indeed, a sustained run on Brazilian assets could set the unit up for a move towards the BRL2.20000-2.3000/US$ area over the coming weeks, should risk appetite remain subdued.

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