Forex: USD/BRL Advances

On 13 November 2012, the USD/BRL pair was up by 0.67 percent at 16:35 GMT, according to data by FXEmpire. The strong upward movement of the USD/BRL pair indicates that hard times for the Brazilian real, which in the beginning of November fell to its lowest level since June, are far from over.

**Hard Times for Brazil’s Currency**
The upward movement of the USD/BRL pair is hardly surprising, given the prevailing investor concern as regards the global economy. Bloomberg recently quoted Reginaldo Galhardo, foreign-exchange manager at Treviso Corretora de Cambio, as saying that investors were concerned with global growth. “The market is seeking to hedge with the dollar and move away from other currencies in a classic risk-aversion move,” noted Mr Galhardo, commenting on the real’s depreciation.

The real is suffering alongside other emerging market currencies such as the Mexican peso, with global growth concerns spurring demand for havens such as the dollar and the yen. Today’s major issue which weighed on investor sentiment toward riskier assets was the delayed decision of Eurozone finance ministers as regards the additional funding for Greece.
FXStreet recently quoted Cristian Maggio, senior emerging markets strategist at TD Securities, as expecting the USD/BRL to stay at the 2.01/2.03 trading range until H2 2013.