Analysis: Brazilian real quo vadis?

Following an excellent start this year, the real has begun underperforming against Latin American currencies, with the Mexican peso, for example, climbing in response to strong remittances, rising interest rates, and a potential increase in manufacturing activity from US companies relocating production from China.

The Brazilian real (BRL) has been highly volatile against the US dollar (USD) so far in 2022, shifting from being one of the top performers against the greenback earlier in the year to a selloff that made it one of the biggest underperformers among emerging market currencies.

What has driven the volatility, and what is the outlook for the foreign exchange (forex) pair for the rest of the year?

This article looks at the real’s performance against the US dollar and some analysts' latest USD/BRL forecast.

WHAT DRIVES THE USD/BRL PAIR?

The USD/BRL forex pair refers . . .

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