It has hardly surprising that the Real will become the poster child of the hot money flow in the FX market, after all it does offer a yield return that is over 10 times what can be found on quality Euro Zone debt.
Short-term rates are now lower in America than in the euro area, and the yield premium on American bonds over euro-area bonds has been all but eliminated.
In research that Wolfram Schlenker and I have conducted using the Hadley III climate model, we project yield declines of about 20% over the next 20 years, holding all else the same.