Brazil stocks were lower after the close on Thursday, as losses in the real estate, industrial and financial sectors sectors led shares lower. At the close in Sao Paulo, the Bovespa index lost 0.01%.
Major Latin American currencies fell against the dollar on Thursday as global trade tensions strengthened the greenback and political uncertainty in Brazil and Argentina. Latin America's largest economy heads into a presidential election in two months time and in Argentina a major corruption scandal is unfolding.
Brazil's central government registered a primary budget deficit of 154.255 billion reais (US$49.40 billion) in 2016, meeting its target but recording a third consecutive annual deficit that reflects the dire state of the country's finances. In December, the country posted a primary deficit of 60.124 billion reais (US$19.25 billion).
The Brazilian Real weakened further on Friday after interim President Michel Temer showed concern over currency strength, while stocks edged lower following a heavy batch of quarterly results including state controlled oil company Petrobras.
Brazilian markets weakened on Monday after the acting lower house speaker in Brazil's Congress annulled an impeachment vote, though losses were pared as investors bet the move would delay rather than prevent leftist President Dilma Rousseff's removal from office.
Brazilian share prices surged on Thursday to close 6.6% higher, a seven-year record, after fresh setbacks to populist President Dilma Rousseff raised the prospect of her being driven from power.
The Brazilian central bank will take the necessary measures to bring inflation back to the 4.5% target in 2017, bank director Altamir Lopes, said on Thursday. It is the first time the bank has given a timeframe for reaching the center of its official target range after it dropped its outlook to meet this goal late 2016 due to a weaker Brazilian currency.
Brazil's currency fell to its weakest level ever as investors cast a wary eye on negotiations over spending bills that could further complicate the country's tenuous fiscal position. The currency, like others across Latin America, was also hammered by a global rise in the dollar sparked by increased expectations that the US Federal Reserve is still on track to raise interest rates this year.
Brazil's currency, the Real, tumbled on Thursday after the government announced it would slash its fiscal savings goals for this year and next, raising investor fears that the country may lose its investment-grade credit rating.
Brazilian Finance Minister Joaquim Levy said he expected the country’s economic slowdown to be temporary and that fiscal discipline remained central to ensuring the recovery as a commodity price boom waned. Addressing investors in London, Levy said fiscal discipline was needed to cushion the economy against the inflationary effects of the falling Real currency.