The Brazilian real appreciated sligthly to 4.98 per USD in mid-May, giving back part of its recent sharp losses after briefly weakning beyond the 5.00 level. The downward move followed reports alleging ties between Senator Flavio Bolsonaro, a contender in Brazil’s October presidential election, and Daniel Vorcaro, owner of failed lender Banco Master, who was charged with fraud. Investors assessed that the allegations could weaken Flavio Bolsonaro’s candidacy, currently seen as President Luiz Inacio Lula da Silva’s main challenger. Abroad, the US dollar strengthened alongside rising Treasury yields, as markets increasingly priced in the possibility of additional Federal Reserve rate hikes later this year.