Brazilian equities and currencies slumped on Tuesday after an opinion poll on the presidential election showed leftist candidates gaining ground while market-friendly centrists did not.
In Brazil, the Real currency and benchmark Bovespa stock index strengthened slightly on Wednesday. Political uncertainty in Brazil took a toll after judicial authorities canceled the release of a closely-watched opinion poll on technical grounds.
The Brazilian Real slumped on Monday as mounting concerns over this year's presidential election added to global risk aversion, while the Argentine peso extended a recent sell-off that also spread into stock markets in Latin America.
The Brazilian Real led losses in Latin America as lingering concerns over presidential elections overshadowed a largely positive environment for emerging market assets. The US dollar ended trading at 4.333 Reales.
The Brazilian currency Real fell to a 31-month low versus the U.S. dollar on Thursday on jitters ahead of the country’s October election. Jitters across emerging markets caused by a stronger U.S. dollar and exacerbated by the unfolding currency crisis in Turkey already took a toll on the Brazilian unit before this week.
Things are looking up for the Brazilian economy - but it won't be due to the Olympic games starting this week, according to a UBS report published last Friday.
Twenty years ago, first July 1994, after decades of financial turmoil, Brazil introduced its current currency, the Real, marking a turning point in the country's fight against hyperinflation.
Brazil’s twelve-month inflation ended August at its lowest level this year, according to a central bank survey of fourteen economists. This means the 12-month IPCA consumer-price index is likely to weigh in at 6.10% for August, down from 6.27% at the end of July.
Brazil threatened on Friday a further clampdown on speculative foreign capital, firing a warning shot in the currency war Finance minister Guido Mantega blames on money-printing by Western central banks.
Brazil will cut energy costs for companies and consumers while pressuring banks to lower lending rates to accelerate growth, said President Dilma Rousseff in a speech on national television to commemorate the country’s independence.