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Non-Tech : The Brazil Board

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To: Paul Senior who wrote (261)	5/2/2011 12:58:59 AM
From: DewDiligence_on_SI	Read Replies (1) of 2504

An overvalued Real is bearish for Brazilian exporters because it makes their operating costs higher than for exporters in countries with relatively cheaper currencies (e.g. Australia). In some markets, tis won’t matter much, but in others (e.g. iron ore) it could matter a lot. >if the Real drops to a less-overvalued place, then Brazilian exports will be even less expensive and more attractive to foreign purchasers. Wouldn't the large cap Brazilian companies then show even greater sales and profits on their p&l's?< Yes; however, such a reversal probably won’t happen as long as Brazil’s interest rates are the highest in the world.

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