Trade Update: Short the Brazilian Real

 

This morning I wanted to revisit Rich Ross’ currency call on shorting the Brazilian Real (BRZ) and cut right to the chase to the bottom line. 

Image Courtesy Benjamin Thompson: http://www.flickr.com/people/beija/

Investors must be aware of what effect currencies can have on stock prices, especially lately for stocks that have exposure to the real

We are looking at a key technical move but wouldn’t be happening if Brazil’s government wasn’t letting it happen.

The government is comfortable with inflation and is continuing a fiscal adjustment that aims to make the economy more competitive, chase out foreign speculative money flows, and to reset domestic utility pricing and concessions. 

This was an important break higher and it could go to 2.20 in my view.