Brazilian Real Drops as Growth Outlook Worsens

The Brazilian real fell today as the worsening outlook for nation’s economic growth made the currency less attractive for market participants.
The Central Bank of Brazil revised the growth outlook for this year negatively in its weekly forecast. The expected increase of gross domestic product stands at 0.13 percent now compared to 0.38 percent in the previous week’s estimate. Still, many market analysts believe that the real should be attractive to speculators, particularly carry traders. The currency’s attractiveness in carry trade due Brazil’s high interest rates helped the real to end the last week with gains.
USD/BRL gained from 2.5830 to 2.5882 as of 16:45 GMT today, reaching the high of 2.6079 intraday.

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