DJ Brazilian Real Looks Overvalued -- Market Talk - WSJ
7:54 ET - Considering Brazil's economic and political problems, the recent appreciation of the Brazilian real versus US dollar makes the Brazilian currency overvalued. "Our BRL model, which compares the current pricing with the average of emerging market currencies controlling to the country's risk of default and currency volatility, suggests that BRL is currently overpriced by BRL0.20 (fair value of BRL3.95/USD), one of the highest differences this year so far," says Luciano Rostagno, Latin America strategist at São Paulo-based Mizuho Bank of Brazil. The real was recently trading at 3.77 per dollar.
7:54 ET - Considering Brazil's economic and political problems, the recent appreciation of the Brazilian real versus US dollar makes the Brazilian currency overvalued. "Our BRL model, which compares the current pricing with the average of emerging market currencies controlling to the country's risk of default and currency volatility, suggests that BRL is currently overpriced by BRL0.20 (fair value of BRL3.95/USD), one of the highest differences this year so far," says Luciano Rostagno, Latin America strategist at São Paulo-based Mizuho Bank of Brazil. The real was recently trading at 3.77 per dollar.
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