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Brazil's real fell to a record intraday low of 4.6655 per dollar on Thursday, March 5, 2020. Economy Minister Paulo Guedes blamed the slide on the coronavirus epidemic's economic impact and warned the currency could weaken to 5 per dollar.
He said the move reflected the epidemic rather than a change in Brazil's risk perception.
A weaker real lowers the dollar cost of Brazilian exports, which can pressure dollar-denominated soybean, corn and meal prices. It also raises the cost of imported feed ingredients for Brazilian buyers.
bloomberg.comAline OyamadaMar 5, 2020After 301 past bullish macro events, USDBRL moved a median +0.4% over 5 sessions (57% higher; middle half -1.2% to +1.7%), and +1.0% over 20.
After 273 past bearish macro events, SOY moved a median -0.4% over 5 sessions (44% higher; middle half -2.4% to +1.4%), and -0.5% 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.
Same-day record intraday low of the real at 4.6655 per dollar, driven by coronavirus-related risk-off sentiment and rate-cut expectations, directly explains the 2.28% BRL/USD move (currency/sentiment).
