Donald Trump’s election for president of the United States propelled a worldwide social media frenzy. But, of course, there were those non-Americans who don’t live in the U.S. and simply shrugged their shoulders and said: “that’s not my problem.” But guess what? It’s everyone’s problem. Brazil’s currency, the Real, has tumbled since last Wednesday when the election was called.
The Brazilian Real weakened as much as 2.4 percent to 3.47 to the dollar on Monday. Over the last four days, the Real has lost 8.9 percent of its value. Before Donald Trump’s win, the Real was the best-performing currency in the world against the U.S. dollar, having gained nearly 24 percent in value, according to Thomson Reuters.
Brazil’s Central Bank publishes weekly reports with forecasts by the country’s top economists. Since last week, projections have been lowered, and the GDP retraction for 2016 has been revised from 3.31 percent to 3.37 percent.
The Ibovespa, São Paulo’s stock market index, has been extremely volatile since the former reality TV star won the U.S. presidential election. After dropping 0.98 percent early in the morning, the index bounced back in the afternoon. At 4 pm (Brazilian time), the index was 0.11 up.
In addition to the “Trump Effect,” traders say that an investigation led by Brazil’s Superior Electoral Court has caused concern among investors. The court is scrutinizing campaign donations to Dilma Rousseff’s electoral committee that could lead to the annulment of the entire ticket, meaning that incumbent President Michel Temer could be removed from office.
Source: plus55.com