Brazilian Real Jumps vs. US Dollar

The Brazilian real jumped as much as 2% versus the US dollar today as Brazil’s central bank refrained from intervening in markets to support the currency while the government showed willingness to embark on fiscal austerity.
Investors were concerned that President Michel Temer might avoid austerity measures to gain support from the divided Congress. Yet it look’s like that is not the case as Temer announced that he is going to reduce the budget deficit to 139 billion reals ($42 billion) in 2017 from 170.5 billion reals expected for this year. The market was pleased to see government’s readiness to make bold steps, and this drove the real higher.
USD/BRL climbed 2% to 3.30 today.

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