Monthly FX Bulletin – October 2024

October 28, 2024 edition of the TCP / VNCFX FX bulletin, with September highlights. Brazil's Central Bank began a new tightening cycle (Selic from 10.5% to 10.75%) while the Fed cut rates by 0.5 point, widening the differential to about 6 points; unemployment fell to 6.6%, the lowest since 2014. Even so, the real was down 16.4% for the year. The bulletin argues that medium-term real strength is more hope than fact, given fiscal risk and a debt-to-GDP ratio heading toward 100%, and suggests that those who need to buy dollars take advantage of moments of strength in the real.