Brazilian Real Inflows Near Post-COVID Highs, Supporting Carry Trade
BNY strategist Geoff Yu reports that portfolio inflows into Brazil are at their highest since the pandemic, driven by demand for equities and government bonds, underpinning the real’s carry appeal ahead of the Selic decision.
Brazilian portfolio inflows have climbed to levels not seen since the post-COVID period, according to BNY’s Geoff Yu, as strong demand for equities and government bonds reinforces the real’s attractiveness for carry trades.
The inflow data comes just before the central bank’s Selic rate decision, where elevated rates have kept the currency’s yield advantage intact. Yu notes that the resilience of these flows suggests continued support for the real, even as global risk sentiment fluctuates.
The real has benefited from high interest rate differentials, and the current flow picture may provide a buffer against external headwinds. Market participants will watch the Selic statement for any forward guidance that could alter the rate trajectory and impact carry positioning.
Source: FXStreet Forex News