Back on Nov. 14 we suggested shorting the Brazilian real against the U.S. dollar, and again reiterated our position on Nov. 23 with great success. Be aware of what effect currencies can have on stock prices, such as stocks with exposure to the real.
Technician Richard Ross and co-founder Tim Seymour highlighted the technical and fundamental setup in the Brazilian real, alerting Emerging Money readers to the breakout of the currency consolidation. The USD/BRL has now not only broken above the channel, but has blown through the May high prior to the four-month consolidation, well on its way to Tim Seymour’s target price of 2.20.
The trade is working well and should continue to do so as Brazil’s government maintains its efforts to make the economy more competitive by stoking more inflation.