While domestic turbulences remain, the Brazilian currency experiences a relief thanks to an external factor. Itau-BBA’s report indicates that emerging market currencies were favoured by lower-than-estimated inflation in the U.S. According to the Brazilian investment bank, the good news about inflation should delay the U.S. Federal Reserve’s decision to hike the benchmark interest rate before year-end.
In Brazil, inflows’ outlook is also on a positive trend. The exchange rate closed the week at 3.15 reais per dollar, appreciating 0.3% and performing in line with its peers. Brazilian Central Bank’s stock of FX swaps is currently $24 billion.The currency flow maintains the positive trend. Although foreign flows to the stock market are negative by $807 million during the month.