Today, we look at how the Brazilian currency can bounce back from its Covid-19 rout. Brazil’s vaccine deals. And the first consequences of Brazil’s anti-China moves.
There is hope for the Brazilian currency
The Brazilian Real has been one of the worst-performing currencies in the world this year, losing 33 percent against the U.S. Dollar since January 1. But the Brazilian currency could enjoy redemption in 2021, according to some banks’ predictions.
- The recent disclosure that three potential coronavirus vaccines have a 90-plus-percent efficiency rate — and Pfizer announcing the conclusion of phase 3 trials — led banks to project a massive devaluation of up to 20 percent for the American currency.
What they are saying. A report by Citigroup says that the massive distribution of vaccines will spur trade and boost the world’s top economies — which would benefit Brazil, a commodity exporter. Meanwhile, the bank expects the U.S. Federal Reserve to continue its stimulus policies and “err on the side of caution” before increasing interest rates. That could encourage investors to take their money into riskier markets, such as Brazil.
- Goldman Sachs is less bullish, but still expects the USD to slide 6 percent on a trade-weighted...