(Bloomberg) -- The Brazilian real extended its world-beating rally and reached the strongest level since March 2020 as foreigners pile into the nation’s local assets.

The currency strengthened 0.2% on Thursday to 4.8166 per dollar, the highest in more than two years. It’s now up 15.8% this year, leading gains among all major currencies tracked by Bloomberg. 

Brazilian assets have been attracting emerging-market investors despite heightened global volatility due to its exposure to commodities, high interest rates and some fiscal room despite increased spending ahead of the presidential election.

The Brazilian real gained momentum after breaching the 4.8942 per dollar level last seen in June 2021, which triggered stops at bearish positions. The currency now has no significant technical barrier until 4 per dollar, an important psychological mark. 

Foreign investors, who fueled the real’s rally in the first two months of the year, are resuming their bullish bets after staying in the sidelines for a few weeks due to the Russia-Ukraine war. Non-residents cut their long dollar positions through derivatives by $3.9 billion dollars between March 14 and March 23, while local stocks attracted $1.6 billion in the week ended on March 18, almost four times the previous week inflow, according to local exchange B3 data.

 

 

 

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