The Real, the currency of Brazil, reached a 12-year high versus the Dollar in July. “The combination of a strong economy and high nominal and real interest rates continues to attract significant foreign capital inflows, putting upwards pressure on the Brazilian real,” wrote Vassili Serebriakov, Currency Strategist at Wells Fargo Bank. Analysts at the bank point out that they see more scope for further gains in 2011 “as the US Federal Reserve maintains its very accommodative policy stance.” Domestic fundamental are sufficiently supportive. The Real should see a downward correction in 2012, when Fed’s policy changes.
They project the USD/BRL at 1.5300; 1.5000; 1.5200; 1.5400; 1.5700 and 1.6000 in 3, 6, 9, 12, 15 and 18 months respectively.
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