The cost of buying options to protect against swings in Brazil's real rose to the highest in two weeks as investors gauge whether lawmakers will vote to impeach President Dilma Rousseff.
The increase in volatility reflects the guesswork traders are undertaking as they try to divine the chances that Rousseff will be ousted, potentially clearing the way for a new government that would be better positioneAs d to pull the country out of its worst recession in a century. The real's 12 percent gain this year is the biggest among 150 currencies worldwide, bolstered by speculation that Rousseff will lose her battle to stay in office.
"Traders are protecting themselves ahead of a weekend which will probably have a lot of political news all over the media," said Leonardo Monoli, a partner at Jive Asset Gestao de Recursos in Sao Paulo.
Complete your profile to continue reading and get FREE access to Treasury & Risk, part of your ALM digital membership.
Your access to unlimited Treasury & Risk content isn’t changing.
Once you are an ALM digital member, you’ll receive:
- Thought leadership on regulatory changes, economic trends, corporate success stories, and tactical solutions for treasurers, CFOs, risk managers, controllers, and other finance professionals
- Informative weekly newsletter featuring news, analysis, real-world case studies, and other critical content
- Educational webcasts, white papers, and ebooks from industry thought leaders
- Critical coverage of the employee benefits and financial advisory markets on our other ALM sites, PropertyCasualty360 and ThinkAdvisor
Already have an account? Sign In Now
*May exclude premium content© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
