Back in July, I made the argument that there could be more upside ahead for the Brazilian real – even though the currency is inherently volatile due to its emerging market status.
The reason for making this argument was that the Federal Reserve had been anticipated to implement rate cuts going forward - which have subsequently come to pass. Moreover, real interest rates in Brazil were among the highest for emerging market economies.
In this regard, I anticipated that the real would see some upside for these reasons.
However, this has not been the case.