Earlier this month, Moody’s Investors Service pared its outlook on Brazilian sovereign bonds to stable from positive while affirming the credit rating of Latin America’s largest economy at Baa2. BZF is still up almost 2.8% since the start of October. [EM Bond ETF’s Could Fall as Moody’s Downgrades Brazil]

Brazil’s central bank has been one of the more voracious raisers of interest rates, part of its effort to fight inflation.  Earlier this month, the central bank raised rates for a fifth straight meeting, announcing a 50-basis point increase to 9.5%. Even if another interest rate hike does not materialize before the end of 2013, it is widely expected Brazil will have double digit interest rates at some point in 2014.

WisdomTree Brazilian Real Fund