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Brazil – Quietly +14% In USD Terms From December Lows

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The Brazil trade continues to work with equal lifting coming from both the currency and the Ibovespa. In total return you have seen a 14% move off the lows on Dec 16th with the drivers being.

Brazil Flag

This won't be pretty or a straight line but Brazil will catch many off guard in 2015 with its constructive performance.

  • Dilma trying to make structural reform - yes, that's right real reform in Brazil ( EWZ , quote ). It hasn't happened and won't happen overnight but even lip service on budget cuts announced last week is impressive
  • Emerging Market currencies overall laughing the face of a stronger U.S. Dollar ( UUP , quote ). The DXY strength is clearly and Euro & Yen phenomenon for now. Since the December lows the USD has fallen against key Emerging Market crosses:

    • 70 to 11.40 in ZAR
    • 40 to 2,32 in TRY
    • 80 to 14.60 in MXN
    • 50 to 61.50 in INR
    • 1120 to 1182 in KRW

  • Commodities grinding into a base
  • Better China ( FXI , quote ) data
  • Brazilian banks sowing better loan figures and reasonable NPL measures
Chart_ EWZ

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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