RIO DE JANEIRO, BRAZIL - The latest mounting political noise is creating a negative scenario for the Brazilian real and risks further pressure on long-term interest rates amid rising fears of a less conservative fiscal approach, Morgan Stanley strategists said in a report Monday.
In the case of foreign exchange, strategists cited an already loaded level of positioning favorable to the Brazilian real, expensive valuations and heightened sensitivity to dollar fluctuations abroad as weighing against the currency, with the real's risk/reward undermined despite the prospect of the Central Bank raising interest rates.
"We think that the currency will . . .
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