According to JP Morgan, Brazil’s real continues to outperform the Mexican peso, driven by a higher interest rate in Brazil (14.25%) compared to Mexico, where the central bank is cutting borrowing costs. Brazil has become a popular destination for carry traders, while Mexico faces slowing economic activity and potential recession. Brazil’s monetary authority is expected to continue raising the Selic rate in May, while Mexico’s central bankers are signaling further interest rate cuts of 50 bps ahead.