Sunday, December 6, 2009

Ever wondered why the real was overvalued?

From Michael Gomez:
At current differences in like maturity nominal yields between U.S. dollar- and Brazilian real–denominated debt, the U.S. dollar would have to appreciate by 70% versus the real over the life of the investment for U.S. dollar debt to outperform.
Local-currency Brazilian bonds yield up to 13%.

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