Here is the latest weekly summary on the Brazilian FX/Capital Markets, by Itau:


A short but busy week left the real depreciated… 

In Brazil, the short Easter week was marked by some inflation-related headlines that influenced currency markets. The real depreciated 0.61%, despite the sale of dollars in the derivatives market by the central bank on Wednesday. The currency closed the week trading at 2.02 per dollar (Charts 1, 2 and 3).

…despite the currency intervention. 

The Brazilian Central Bank entered the swap market on Wednesday in an attempt to contain further weakening of the real (Chart 4).

Trade-related foreign exchange flows remained positive… 

As of March 22, the total trade-related flow was $1.3 billion, partially offset by a financial flow of negative $1.1 billion. At the margin, though, both figures seem positive (Charts 5 and 6).

…and issuances in currencies other than dollars continue. 

Another issuance by a financial institution was carried out this week – once again, in reais (Chart 7 and table).

Stock-market flows remain weak… 

As of March 26, stock market inflows stand at $260 million. Although the numbers are positive at the margin, the month will probably end with poor inflow into the stock market relative to the previous months (Chart 8).

…and foreigners reduced their long position in dollar futures. 

Foreign exposure to the dollar futures market was reduced, from $5.6 billion to $5 billion. The cupom cambial flow was neutral, maintaining a similar exposure to that of the previous week (Chart 9).

Source: Itau

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