Latin American managers are more optimistic about Brazil's real, shows Bank of America survey

In May, Brazil's real surged 3.5%, the best Latin American performance and the second in the world, behind only the Hungarian forint

Brazilian currency, real
Photo: Reuters/Sergio Moraes
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  • 33 panelists with about $112 billion in assets under management participated in the BofA survey for Latin America;
  • Most see the dollar below R$ 5.30 at the end of this year.

Latin American managers are more optimistic about the Brazilian exchange rate and bet that the real will have the best regional performance in the next six months, with a majority now seeing the dollar below R$ 5.30 at the end of this year, showed a Bank of America survey this Tuesday.

The improvement in sentiment came after the appreciation of the exchange rate in recent weeks. The future dollar fell 9.7% between the high of April 13, above R$ 5.76, and the low of the last May 10 (R$ 5.2065).

READ ALSO: Dollar broadly weaker against Brazil real after U.S. jobs data disappoint

In May, Brazil‘s real surged 3.5%, the best Latin American performance and the second in the world, behind only the Hungarian forint, which increased 4.4% in the period. The fall of the Brazilian currency in the accumulated for 2021 – which reached 10.4% on March 9 – is now at 1.2%.

And more increases may be ahead. According to the BofA survey, 45% of the consulted professionals expect the real to be the best performing currency in the next six months. The US dollar is behind, with just over 20%, followed by the euro, renminbi and Mexican peso.

The survey also showed that 60% of the participants project that the dollar will be below R$ 5.30 by the end of 2021, double the percentage of the previous study (31%). It is noteworthy the increase in the share of those who predict that the dollar will be between R$ 4.81 and R$ 5.10, which went from less than 10% in April to more than 20% in May.

READ ALSO: Brazil real hits four-month high as global banks turn hawkish on interest rates

At the same time, respondents abandoned estimates that the dollar would reach the end of the year between R$ 5.61 and R$ 5.90 and between R$ 5.91 and R$ 6.20.

A total of 33 panelists with about $112 billion in assets under management participated in the survey for Latin America.

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