The Brazilian Real was knocked off of its two week high against the US Dollar after Credit ratings agency Moody’s Investors Service cut the South American nation’s outlook from positive to stable.
The Real climbed to its highest level in two weeks earlier in the week as concerns over the closure of the US federal government increased the odds that the Federal Reserve will delay making any cuts to its monetary easing programme. Such a delay helped boost emerging market currencies that have benefited from the Fed programme.
Thursday’s fall was the result of Moody’s rating downgrade. The ratings agency cited Brazils rising national debt and weak growth prospects as the main causes for the cut. The nation’s government debt is expected to stay around 60% of national GDP which is higher than the 45% expected by economists. The Brazilian Central Bank also knocked the Real by revealing that it had trimmed the nation’s economic growth outlook for 2013 to 2.5% from 2.7%.
“Even though there are signs that the Brazilian economy may be starting to recover, Moody’s view is that, if and when the upturn materializes, it is unlikely that it will be strong enough to restore a positive trend in Brazil credit metrics,” Moody’s said in a statement yesterday.
According to recent data Latin Americas biggest economy expanded less than expected over the last five out of six quarters. The new rating now puts Brazil’s economy below that of South Africa, Mexico and Russia and on the same footing as Italy and Peru.
Current Real (BRL) Exchange Rates
The Pound Sterling/ Brazilian Real Exchange Rate is currently in the region of: 3.5546
The Euro/ Brazilian Real Exchange Rate is currently in the region of: 2.9848
The US Dollar/ Brazilian Real Exchange Rate is currently in the region of: 2.1948
The Australian Dollar/ Brazilian Real Exchange Rate is currently in the region of: 2.0599
The New Zealand Dollar/ Brazilian Real Exchange Rate is currently in the region of: 1.8238
The Canadian Dollar/ Brazilian Real Exchange Rate is currently in the region of: 2.1245
Correct as of 14:45 pm GMT
Comments are closed.