| Above graph is a line chart of USD/BRL from January 2014 to 11 December 2014Brazilian Real made a low of 2.6546 against greenback a level not seen since April 2005. Brazilian economy is struggling as investor confidence continues to lower. Real started falling when President Dilma Rousseff was elected in the month of October 2014. She was elected earlier which has led Brazil bankrupt on the back of her policies then. In addition, the slide also reflects low commodity prices and an increasing expectation that the Fed will raise U.S. interest rates in the near future.The currency depreciated the most ahead of FED meet scheduled on 16th December 2014, as FED policymakers might hike the interest rate sooner than expected. US economy continues to improve as employment figures and retail sales [ which made a 8 month high] continue to impress analysts. All the above factors suggest that US economy is indeed on the path of recovery. Dollar index also continues to strengthen making a 5.5 year high at 89.50, which added pressure on many emerging market currencies such as Russia, Brazil, etc. |
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