Brazil is going through difficult times as the real, iron and oil are dropping catastrophically and also the constant deterioration of Brazil’s economy. These are the main reasons why millions of protesters would do anything to accelerate an impeachment of President Dilma Rousseff.
The real dropped 0.9 percent to 3.6186 at 9:37 a.m. in Sao Paulo. It earlier rose as much as 0.1 percent. One-week implied volatility rose 0.79 percentage point to 25.92 percent, the highest among major currencies. A Bloomberg index of 20 developing-nation currencies dropped for the first time in four sessions as raw materials declined. Commodities account for about one-third of Brazil’s exports.
Brazil’s currency got affected after Brazilians noticed a minor two-week gain in seven years, which was spurred by speculation that Rousseff’s removal from office was getting closer, a prospect that some traders say would clear the way for a new government that could bolster growth. On Sunday, peacefully went out to the streets for Rousseff’s ouster in main cities across the country. There were around 3 million people on the streets that day.
“Appetite for risk has been waning with the fall in oil prices, and that could lead the real to partially retrace last week’s gains,” said Ipek Ozkardeskaya, an analyst at London Capital Group.
Economic activity contracted in January, the central bank said Monday, while analysts consulted by Bloomberg had forecast a monthly advance. Oil fell from a three-month high after Iran said it would increase output to the level attained before sanctions, making it less likely that production freezes by Saudi Arabia and Russia will bolster prices. Swap rates on the contract maturing in January 2017, a gauge of expectations on interest-rate moves, rose 0.06 percentage point to 13.79 percent.
Brazilians are tough warriors
Brazilians are protesting non-stop after two years of an investigation known as Lava Jato, or Carwash, exposed widespread corruption, paralyzed Congress and deepened the worst recession in over a century. More events in order to accelerate the impeachment of President Dilma Rousseff are expected to come back soon in the coming days once the Supreme Court creates guidelines for the lower house to join.
Leonardo Monoli, a partner at Jive Asset Gestao de Recursos said that the Brazilians will not tolerate more this archaic and corrupt political environment a single day more and that the market should wait for the Supreme Court on the impeachment guidelines before improving further.
Source: Bloomberg