USD/BRL at lowest since September; inflation in Brazil rises to 10%

By FXStreet FXStreet (Córdoba) – USD/BRL posted the lowest close since September at 3.71 after falling for the fourth day in a row amid a decline of the US dollar across the board.

The Brazilian real rose despite the latest economic data showed no signs of recovery. The unemployment rate rose from 7.6% to 7.9% in October, reaching levels last seen in 2009. Inflation number showed that the annual rate rose to 10.28%, the highest level in 12 years.

Prices in Brazil continue to rise despite the economic recession and the tightening policy from the central bank. Economists now project that the economy will suffer a contraction of about 3% in GDP in 2015.

USD/BRL breaks below 3.75

Today the pair broke the 3.75 barrier that capped the decline during October and November. From a technical perspective, in the short term it could decline further. The next relevant supports might be located at 3.61 and 3.55.

To the upside, the real could lose momentum if USD/BRL climbs back above 3.75; the next key resistance levels lie at 3.86 (Nov 16 high) and 3.96 (Oct 21, 22 & 29 high).
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Source:: FX Street