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 reals 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.
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