Wide-Open Brazil Presidential Race to Drag on Real

Brazil’s real, the world’s worst-performing major currency since February, is likely to suffer more losses in the run up to next year’s presidential election as a wave of recent street protests and a weak economy throw the race wide open, JPMorgan Chase & Co. said.

The tightening of the race in electoral polls, which until March showed President Dilma Rousseff winning in the first round, has become the main driver of investor sentiment and government policy, JPMorgan said. Reflecting the uncertainty, the bank cut its forecast for the real, which it now expects will weaken this year to 2.35 per dollar, compared with an earlier estimate of 2.25, and decline to 2.45 in the run-up to the October 2014 vote.