Brazil Real opens at 4.23 to the dollar

Despite the the U$5 billion intervention by the Brazilian Central Bank yesterday, the Real opened at R$4.23 to the USD. At 9:30 BRT the dollar has settled at R$4.2184, a gain of 1.76% over last night closing.

Some analysts say that the USD could reach as high as R$5.00 by the end of the year if the political/economic crisis is not resolved. The Brazilian Central Bank will not intervene selling international reserves that stand at approximately U$380 billion.

This writer is perplexed at the velocity of the devaluation. The fundamentals are not good but they are not this terrible that can justify a run on the currency of this magnitude. More to come.