Brazilian real, the worst performer of the week: down 7.5%

By FXStreet FXStreet (Córdoba) – The Brazilian real lost 7.5% during the week against the US dollar and reached fresh multi-year lows, pressured by the economic and political environment and the expectations that the country is going to lose the “investment grade”.

The majority of Latin-American currencies lost ground during the week but all outperform the real. The Mexican peso lost 1.15% and the Colombian peso 1.10%, the best of the region was the Peruvian Sol that gained 0.20%.

USD/BRL closer to 4

The pair rose almost 3% on Friday and reached 3.85, the highest level in twelve years. At the beginning of the week USD/BRL was below 3.60. The price of the dollar in Brazil continues to move to the 2002 record high at 4.00.

The outlook for the real remains weak. During the last few days there were speculations about the Finance Minister, Joaquim Levy, leaving the administration. “I think the market continues to look at risks that are considered imminent and dreadful. Levy leaving his post after repeatedly expressing disappointment is the headline that keeps hitting the wire. The risk is a downgrade of Brazil. Without Levy, the downgrade is almost a certainty”, said Cristina Maggio, Head of Emerging …read more

Source:: FX Street