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Brazilian Real Suffers from Decline of Commodity Prices

February 10, 2014 at 17:03 by Vladimir Vyun

Brazilian realThe Brazilian real dropped today as the decline of commodity prices damped demand for currencies of export oriented economies. Brazil’s fiscal problems were also affecting the real’s performance negatively.

The Standard & Poor’s GSCI index of 24 commodities fell 0.2 percent today. It is expected that the Brazilian central bank will increase interest rates, but the real has been falling even after the bank had raised rates for six months in a row. The major reasons for the drop were concerns about possible sovereign credit rating downgrade and quantitative easing tapering by the US Federal Reserve.

USD/BRL was up from 2.3812 to 2.3950 as of 17:03 GMT today.

If you have any questions, comments, or opinions regarding the Brazilian Real, feel free to post them using the commentary form below.

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