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May 12, 2015

EMERGING MARKETS-Brazil's real drops to 3 per dollar on fiscal data, U.S. outlook

Clipping from Reuters.com
By Asher Levine

SAO PAULO, April 30

The Brazilian real weakened sharply on Thursday following disappointing government fiscal results and strong labor market data in the United States.

Other Latin American currencies followed suit, but more modestly, while the region's stock markets were little-changed.

The Brazilian government on Thursday reported its smallest primary budget surplus for the month of March in five years, calling into question its ability to meet the year's fiscal goal and restore investor confidence. 

Concerns over a potential downgrade of Brazil's sovereign credit rating due to poor fiscal management have weighed on the outlook for local securities. The real fell back to the 3-per-dollar mark after nearly a
week trading on the stronger side of the closely watched level. Traders said the currency's loss was also driven by data on Thursday that showed the number of Americans filing new claims for jobless benefits tumbled to a 15-year low last week. Strong U.S. data tends to increase investor bets that U.S. interest rates will rise sooner rather than later, making higher-yielding, but riskier, Latin American assets less
appealing.  Click here for more.



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