Thursday, September 16, 2010

The Peso of the North

Look who's got the strong currencies, as reported by Reuters:

BOGOTA, Sept 15 (Reuters) - Colombia's central bank on Wednesday started purchasing what it said would be at least $20 million daily for the next four months to help ease the rise of its currency, becoming the latest Latin American economy to intervene in its market.

The move left the door open for more measures to curb the peso's COP=RR appreciation and followed intervention by Brazil to ease the real's climb and Peru's buying dollars to curb the sol.

The article is worth a read in its brief entirety.

Yours truly continues to be at least as comfortable with Brazilian real-denominated interest bearings debt instruments as with any multinational stock. The vehicle has the NYSE symbol of BZF, which ties to the short-term money market rate. Not nearly as easy to purchase are real-denominated Brazilian government bonds. These have a different risk-reward calculus from BZF. You may wish to consult a financial adviser and/or do some independent research to see if either of these vehicles makes sense for you.

In any case, the worm has turned. The U. S. dollar is the weak currency. Exchange controls may be more likely in the U. S. than in Brazil.

What is the Spanish word for schadenfreude?

And the Portuguese word for it as well . . .

There just may some of that emotion going on in central banks south of the equator in the Western hemisphere.

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