Most emerging market currencies worldwide rallied on Tuesday after U.S. President Donald Trump criticized the head of the Federal Reserve for raising interest rates, while Brazil's Real fell to its lowest in more than two years on political concerns.
The Real weakened past four to the U.S. dollar for the first time since March 2016 in afternoon trading, as investors fretted over the country's latest election polls. The currency was down 2.01% to 4,0372 units to the greenback.
The benchmark Bovespa stock index was also down, slipping 1.5%.
Trump told Reuters in an interview on Monday that he was not thrilled with Fed Chair Jerome Powell's rate hikes and said the U.S. central bank should do more to help him boost the economy.
His remarks, which seemed to break with the time-honored standard of central bank autonomy, suggested Trump would like to keep a lid on the U.S. dollar as part of his efforts to reduce the U.S. trade deficit.
High interest rates could draw capital away from emerging-market economies toward the United States, boosting the greenback.
Also on Tuesday, the designated NAFTA negotiator for Mexico's incoming president said talks between U.S. and Mexican trade officials are ”making good progress (and) coming to the end.”
Jesus Seade, President-elect Andres Manuel Lopez Obrador's representative in the trade talks, said in Washington that he expects U.S. and Mexican officials to reach a deal by early next week.
U.S. and Mexican trade ministers resumed talks over the North American Free Trade Agreement on Tuesday, in a final push for a deal on the regional auto industry that would pave the way for Canada to return to negotiations later this week.