Brazilian Real Rises on the Back to Oil Price Rise

Latin American currencies strengthened on Monday as crude prices rebounded, supporting demand for higher-risk assets.

Oil prices gained 2.5 percent after falling as much as 2 percent ahead of a meeting of major producers on Wednesday.

Currencies from oil-heavy economies, such as the Colombian and Mexican peso , rose sharply.

The Brazilian real tagged along as investors held off making risky bets ahead of a central bank meeting and gross domestic product figures later this week. Risk appetite drove other emerging markets higher, with the South African rand strengthening 2 percent after rating agencies affirmed the country’s investment grade credit rating.

Brazilian stocks inched up, though gains were limited by concerns that a political scandal could delay the country’s fiscal adjustment.

One of Brazilian President Michel Temer’s closest aides resigned on Friday following allegations he pressured the culture minister to approve a property development plan, unsettling investors with the prospect of renewed political turmoil in Latin America’s largest economy. Key Latin American stock indexes and currencies at 1500 GMT: Stock indexes daily % YTD %

via Kitco

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Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza