The 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 & Poorâs 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.
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