Brazilian real is the worst among developing economies

Brazilian real is the worst among developing economies

2020-05-07 • Updated

USD/BRL jumped before the announcement of the Central Bank of Brazil. What was the reason?

On April 6 the rating agency Fitch decreased the Brazil’s credit rating to negative. The Central Bank of Brazil cut interest rates by 75 basis points, while economists anticipated only 50. Moreover, the Brazil’s monetary policy committee intends to repeat that cut in June. The Brazilian real slumped by 1.8%.

Screenshot_3.png

Brazil interest rate

Reasons of its poor performance are the political uncertainty, the global recession amid the coronavirus pandemic, risk aversion and, also, the strong US dollar. Brazil has been damaged by the coronavirus much more than other countries in Latin America. Brazil is headed towards unseen low rates. The economy has never been in such an environment before.

Let’s look at the USD/BRL chart. The main trend is upward. Now the price is near the recent intraday record high at the 5.75 mark. Let’s see if it breaks through it and moves up further or goes down to the support line on 5.33. The next support is on 5.00. However, with the firmer US dollar the prognosis for the Brazil real is disappointing.

USDBRLH4.png

LOG IN

Similar

Oil: Russia-Ukraine Crisis Could Boost Oil Prices
Oil: Russia-Ukraine Crisis Could Boost Oil Prices

Crude oil futures surged on Monday due to disruptions in Russian refining capacity caused by Ukrainian drone strikes and Moscow's decision to cut output to comply with OPEC+ targets. The West Texas Intermediate (WTI) contract for May settled at $81.95 a barrel, up $1.32, while the Brent contract for May settled at $86.57 a barrel, also up $1.32. Russia instructed...

Latest news

USD: Powell Speaks on Cutting Interest Rates
USD: Powell Speaks on Cutting Interest Rates

Jerome H. Powell, the Federal Reserve chair, stated that the central bank can afford to be patient in deciding when to cut interest rates, citing easing inflation and stable economic growth. Powell emphasized the Fed's independence from political influences, particularly relevant as the election season nears. The Fed had raised interest rates to 5.3 ...

WTT: Currency Pairs To Trade In April
WTT: Currency Pairs To Trade In April

Hello again my friends, it’s time for another episode of “What to Trade,” this time, for the month of April. As usual, I present to you some of my most anticipated trade ideas for the month of April, according to my technical analysis style. I therefore encourage you to do your due diligence, as always, and manage your risks appropriately.

Deposit with your local payment systems

Data collection notice

FBS maintains a record of your data to run this website. By pressing the “Accept” button, you agree to our Privacy policy.

Callback

A manager will call you shortly.

Change number

Your request is accepted.

A manager will call you shortly.

Next callback request for this phone number
will be available in

If you have an urgent issue please contact us via
Live chat

Internal error. Please try again later

Don’t waste your time – keep track of how NFP affects the US dollar and profit!

You are using an older version of your browser.

Update it to the latest version or try another one for a safer, more comfortable and productive trading experience.

Safari Chrome Firefox Opera