We continue to favor the Brazilian Real as markets may be priced for too much BCB easing, while fiscal and political risks associated with President Lula and his cabinet are likely to lessen further going forward. 

We also believe there is long-term value in currencies such as the Colombian and Chilean Pesos as yield opportunities exist, while we also believe local politics are trending in a more favorable direction. In Mexico, the Peso looks rich from a valuation perspective; however, diminished political risk and a central bank that slants hawkish should keep the MXN supported and stable ahead of elections in mid-2024.