USD/BRL retreats after jumping above 3.80

By FXStreet FXStreet (Córdoba) – The Brazilian real is trading up against the US dollar but previously reached new multi-year lows, that day after the Central Bank of Brazil left rates unchanged for the first time since September.

USD/BRL started the day with a bullish bias and jumped to 3.81 hitting the highest level in 12 years but then pulled back dramatically and dropped to 3.73. Currently is hovering around 3.74.

Despite the retreated that took place during the last hours, USD/BRL is up by more than 5% from the level it had a week ago and is among the worst performers in the world.

Central bank, Dilma and Levy

Yesterday the central bank left the Selic rate unchanged at 14.25%. The institution raised constantly the rate since October of last year in order to ease inflation pressures. The CPI index kept rising and is now above 9% while the economy is in recession.

The Finance Minister, Joaquim Levy, canceled his trip to the G-20, to go meet with President Dilma Rousseff. Economic problems continue to increase while the credit rating is at the edge of losing the “investment grade”. The sharp depreciation of the real is also complicating the plans …read more

Source:: FX Street