Real Hits 2024 Low as Brazil Central Bank Disappoints Hawks
- Real was the worst performing currency in emerging-markets
- Traders have priced in September hike amid souring outlook
Roberto Campos Neto
Photographer: Ton Molina/BloombergThis article is for subscribers only.
The Brazilian real slumped to a fresh low for the year after the central bank failed to signal it may hike interest rates at its next meeting, a move that is already priced in by markets spooked by Brazil’s deteriorating inflation outlook.
The real weakened as much as 1.4% against the greenback, leading emerging-market losses amid an increasingly sour sentiment for risk assets. Brazil’s short-maturing swaps declined, reflecting the lower chance of an immediate rate hike, while the long-end of the curve rose as traders adjusted to the increased risk perception.