USD/BRL keeps rising, closer to 4

By FXStreet FXStreet (Córdoba) – USD/BRL is rising sharply for the third day in a row and recently reached at 3.761 a new 12-year high. The Brazilian real and the Colombian peso are among the worst performers in the currency market on Wednesday, losing 1.90% and 1.40% respectively against the US dollar.

The US Dollar is fast approaching record highs, that lie around 4. Before it could find some resistance around 3.80.

Data shows more weakness in Brazil

Last week, the Brazilian GDP 2Q report showed that the economy contracted and fell into recession. Today, the industrial production report showed a decline in July of 1.5%, bigger than expected. Yesterday, the Markit PMI of August dropped from 47.2 to 45.8, lower than the 46.5 expected reading.

“Brazil’s goods-producing sector continued to disappoint in August. After recording softer reductions in output and new orders in July, Latin America’s largest economy saw manufacturing new work sink at the sharpest pace for almost four years”, said Pollyanna De Lima, economist at Markit.

Today the central bank will announce its decision on rates. No change is expected. Since October of last year it has been rising the reference interest rate in order to lower inflation …read more

Source:: FX Street