Exchange Rate in Brazil
Brazil - Exchange Rate
Real strengthens markedly in December amid higher risk appetite
The Brazilian real posted strong gains against the U.S. dollar over the past month, largely owing to positive Covid-19 vaccine developments, Joe Biden’s win in the U.S. presidential elections and continued upbeat domestic economic data. On 3 December, the real hit an over four-month high of 5.15 BRL per USD, before trading at BRL 5.16 per USD on 4 December, which marked a 9.9% appreciation over the previous month. Despite this upturn, the real was still down 18.4% year-on-year and 22.0% year-to-date.
The currency was primarily buoyed in recent weeks by higher risk appetite for emerging-market assets amid positive results from several Covid-19 vaccine trials, improving expectations of a gradual return to normalcy for the global economy. Moreover, Joe Biden’s win in the U.S. presidential elections increased hopes of a more stable U.S. foreign policy stance, further lifting market sentiment. Furthermore, positive economic data for the third quarter, with GDP rebounding at a record-breaking pace, provided an additional boost to the currency, as it underscored the continued economic recovery.
Looking ahead, the real is projected to continue appreciating heading into 2021 as economic activity recovers from the Covid-19-induced slump. Uncertainty over fiscal accounts and debt sustainability poses a downside risk, however.
Our panel sees the real ending 2021 at 5.11 per USD and 2022 at 4.89 per USD.
Brazil - Exchange Rate Data
| 2015 | 2016 | 2017 | 2018 | 2019 | |
|---|---|---|---|---|---|
| Exchange Rate (vs USD) | 3.96 | 3.25 | 3.31 | 3.88 | 4.02 |
Brazil Exchange Rate Chart
Source: Thomson Reuters.
Brazil Facts
| Value | Change | Date | |
|---|---|---|---|
| Bond Yield | 6.79 | -0.82 % | Dec 31 |
| Exchange Rate | 4.02 | -0.13 % | Jan 01 |
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Economic News
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Brazil: Business confidence deteriorates in February
February 26, 2021
The Getulio Vargas Foundation’s (FGV, Fundação Getúlio Vargas) industrial business confidence index came in at 107.9 in February, down from January's 111.3.
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Brazil: Current account logs another deficit in January
February 24, 2021
Brazil’s current account deficit narrowed to USD 7.3 billion in January, from the USD 10.3 billion shortfall recorded in the same month of 2020; however, widening from the USD 5.4 billion deficit in December last year.
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Brazil: Consumer confidence improves in February
February 24, 2021
The seasonally-adjusted consumer confidence index published by the Getulio Vargas Foundation rose to 78.0 in February from January's 75.8.
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Brazil: Economic activity logs worst reading in eight months in December
February 12, 2021
Economic activity grew 0.6% month-on-month in seasonally-adjusted terms in December (November: +0.7% mom).
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Brazil: Retail sales drop at fastest pace in eight months in December
February 10, 2021
Retail sales collapsed 6.1% month-on-month in seasonally-adjusted terms in December (November: -0.1% mom), marking the steepest fall since April.
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