FX.co ★ Brazilian Real Rebounds Slightly

The Brazilian real appreciated slightly to 4.98 per USD in mid-May, recovering part of its recent sharp losses after briefly weakening beyond the 5.00 level. The move came after reports alleged links between Senator Flávio Bolsonaro, a contender in Brazil’s October presidential election, and Daniel Vorcaro, the owner of failed lender Banco Master, who has been charged with fraud. Investors judged that the allegations could weaken Flávio Bolsonaro’s candidacy, currently viewed as the main challenger to President Luiz Inácio Lula da Silva. Externally, the US dollar strengthened in tandem with rising Treasury yields, as markets increasingly priced in the possibility of additional Federal Reserve rate hikes later this year.