December 23, 2024 (NO COMMENTS)

Foreign exchange traders mostly profited from last week’s collapse in the Brazilian real, but the gains were offset by sizable losses on rates positions when the Brazilian central bank (BCB) intervened to stabilise the market.

Doubts over Brazil’s fiscal stability and rising interest rate expectations in the US sparked a massive sell-off in the real, which hit a record low of 6.31 against the US dollar on December 18.

Investors largely anticipated the move. “People were positioned short BRL and