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The real hit its lowest nominal level in its 25-year history during the Covid-19 market panic. Analysts attribute the decline to a mix of global risk aversion, concerns about Brazil's growth, and political friction between President Bolsonaro and Congress.
Domestic political stress on top of the global sell-off suggests the real may stay weak longer, which keeps Brazilian export commodities competitive in dollar terms. The effect is bearish for dollar prices of Brazilian grains.
brazilian.reportNatália Scalzaretto12 de mar. de 2020Após 301 eventos altista de macro passados, Real brasileiro (BRL por USD) subiu em mediana +0,4% em 5 sessões (57% de alta; metade central de -1,2% a +1,7%), e +1,0% em 20.
Variações do benchmark de cada commodity desde o último fechamento antes do evento. As leituras históricas agregam eventos passados do mesmo tipo; descrevem o que aconteceu, não o que vai acontecer. Não é recomendação de investimento.
Analysis attributing the real's record-low rout to global Covid-19 risk aversion, growth concerns and political friction explains the demand for dollars and the weaker BRL.
Published days before the move, it attributes the real's record-low rout to global risk aversion, Brazil growth worries and Bolsonaro-Congress friction, which are sentiment drivers that carried into the March 16 drop.
Global risk aversion, growth worries and political friction with Congress pushed the real to record lows, giving the underlying drivers of the depreciation.
