# Latam stocks, FX retreat as Fed points to continued stimulus

> Latin American stocks and most currencies retreated from recent highs after Federal Reserve comments implied a long road to recovery from the coronavirus crisis. The Fed projected a 6.5% GDP decline this year and signaled years of continued monetary support. Risk appetite weakened as investors reassessed the pace of economic recovery.

- Date: 2020-06-10 · published 2020-06-10T12:00:00.000Z
- Category: macro · region Latin America · magnitude low
- Page: https://feedsoft.ai/events/7612-latam-stocks-fx-retreat-as-fed-points-to-continued-stimulus
- Commodities: [Brazilian Real (BRL per USD)](https://feedsoft.ai/c/USDBRL.md)

## Why it matters

Weaker risk appetite tends to push EM currencies lower against the dollar, raising the cost of dollar-linked imports such as feed ingredients for Latam buyers. The effect on grain and meal prices is indirect.

## Read by commodity

- USDBRL: bullish ▲

## Linked price moves

| Commodity | Date | Window | Change % | z-score | Why linked |
| --- | --- | --- | --- | --- | --- |
| USDBRL | 2020-06-17 | 5 | +7.5% | 2.9 | Fed's cautious outlook on June 10 (6.5% GDP decline, prolonged stimulus) cut risk appetite and weakened EM currencies including the real, a sentiment channel that could contribute to a sharp BRL move. |

## Similar past events

| Commodity | Date | Event | 5-day % | 20-day % |
| --- | --- | --- | --- | --- |
| USDBRL | 2024-08-30 | [Political headwinds continue to drive LatAm FX uncertainty - Euromoney](https://feedsoft.ai/events/29019-political-headwinds-continue-to-drive-latam-fx-uncertainty-euromoney.md) | -0.8% | -3.6% |
| USDBRL | 2018-03-01 | [Latam currencies weaker with eyes on Fed; stocks edge up](https://feedsoft.ai/events/66187-latam-currencies-weaker-with-eyes-on-fed-stocks-edge-up.md) | -0.2% | +2.9% |
| USDBRL | 2017-09-05 | [Brazil: Rate cuts to continue](https://feedsoft.ai/events/69154-brazil-rate-cuts-to-continue.md) | -1.3% | +0.9% |
| USDBRL | 2023-05-02 | [EMERGING MARKETS-Brazil's real leads Latam FX down, stocks near one-month low \| Kitco News](https://feedsoft.ai/events/36149-emerging-markets-brazil-and-apos-s-real-leads-latam-fx-down-stocks-near-one.md) | +0.1% | +1.5% |
| USDBRL | 2021-08-26 | [Latam FX rattled by Fed fears, rising COVID cases \| Financial Post](https://feedsoft.ai/events/45773-latam-fx-rattled-by-fed-fears-rising-covid-cases-financial-post.md) | -1.3% | +0.9% |

## Sources

- reuters.com: https://www.reuters.com/article/emerging-markets-latam/emerging-markets-latam-stocks-fx-retreat-as-fed-points-to-continued-stimulus-idUSL1N2DN1SX/

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Data from Feedsoft AI (https://feedsoft.ai/). For information only; not investment advice.