FXStreet (Edinburgh) – The research team at BBH noted the increasing softness surrounding the Brazilian currency.
Key Quotes
“The Brazilian real underperformed yesterday, making new highs for the cycle”.
“The currency had been holding up relatively well until yesterday, but that changed with a near 2% depreciation, taking the dollar to BRL 3.6169, a level not seen since 2003”.
“Part of the reason was, as usual, domestic. The political situation has worsened again as the most important member of the government coalition, the PMDB, threated to split from the ruling PT”.
“This only compounded the growing concerns of fiscal slippage relative to the initial ambitious plans of Finance Minister Levy. Not even the positive news that President Dilma would conduct a political reform to cut the number of ministers was enough to improve the mood”.
(Market News Provided by FXstreet)