Good morning! Today, we talk about what’s going on with the currency. Brazil’s new chief justice. And a surge in U.S. visas issued in Brazil.
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Currency and interest curves going in the wrong direction
The U.S. dollar closed Wednesday trading above the psychological mark of BRL 5 to the greenback. Meanwhile, the yield on 10-year bonds continues a months-long climb.
What’s happening. The Brazilian economy is performing better than expected, benchmark interest rates are going down (but are still high enough, even for speculative investors), and inflation seems under control. Experts say that, in fact, the problem this time is not necessarily in Brazil.
- The U.S. Federal Reserve decided last week to leave interest rates unchanged at their highest level in two decades — and said another hike could come before the end of the year. When American rates are high, the dollar grows stronger because Treasury yields become more attractive.
- Chinese economic hiccups are another concern. The Asian giant is Brazil’s outright top trading partner. If it starts to...