Brazil: Investors seek protection against possible fiscal profligacy due to elections

The market shifted its focus to domestic issues following Bolsonaro's announced tax cut plan to control inflation.

RIO DE JANEIRO, BRAZIL - Traders in Brazil are rushing into hedges to protect against weakness in the Brazilian real and higher interest rates amid an expected fiscal splurge from October's presidential election.

Traders flocked to long dollar positions in the futures market and rushed to replace swap rate takers with payers on Tuesday, June 7, after President Jair Bolsonaro announced a plan to cut fuel prices on Monday. That . . .

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