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The Brazilian real fell to a 2.5-year low against the dollar, with USD/BRL moving above 4.00. Danske Bank analyst Jens Pedersen linked the move to worries that reform-oriented candidates have weak support ahead of the presidential election.
A sharply weaker real raises the cost of imported feed ingredients for Brazilian buyers and can pull in more Brazilian soybean and corn exports, supporting dollar-denominated grain prices. Analysts also flagged a possible central bank rate hike to defend the currency.
forexcrunch.comFX StreetAug 22, 2018After 301 past bullish macro events, Brazilian Real (BRL per USD) moved a median +0.4% over 5 sessions (57% higher; middle half -1.2% to +1.7%), and +1.0% over 20.
Moves of each commodity's benchmark from the last close before the event. Historical reads pool past events of the same kind; they describe what happened, not what will. Not investment advice.
Election-related worries about weak support for reform-oriented candidates drove the real to a 2.5-year low in the window, a direct sentiment/risk-premium driver.
