Brazil’s Real Falls as U.S. Rate Outlook Damps Emerging Markets

Brazil’s real dropped for a second straight day as speculation that the U.S. Federal Reserve will raise interest rates later this year damped demand for higher-yielding assets from emerging markets.

The real depreciated 0.3 percent to 3.0056 per U.S. dollar in Sao Paulo after falling 0.7 percent last week. One-month implied volatility on options for the real, reflecting projected shifts in the exchange rate, remained the highest among 16 major currencies tracked by Bloomberg.