Brazilian Real Weakens Against Dollar, Shares Decline
September 28 2015 - 6:20PM
Dow Jones News
SAO PAULO—The Brazilian real closed at its second-weakest level
ever against the dollar on Monday as the country's political
problems continue to worry investors, and shares declined.
The Ibovespa stocks index fell 2% to 43956 points. The real
exited active trading at 4.0714 to the dollar, according to Tullett
Prebon via FactSet, after closing at 3.9708 on Friday. Monday's was
the real's second-weakest close against the dollar since the
currency was launched in 1994.
The tension between President Dilma Rousseff, whose approval
ratings have plummeted to less than 10%, and the country's
Congress, which has yet to approve the government's package of
austerity measures and has overturned some vetoes of spending
measures, continues to spook investors, said Reginaldo Galhardo, a
manager at the Treviso brokerage in Sao Paulo.
"The political situation is still generating a lot of
uncertainty," he said. "The fight between Dilma and Congress is
scaring people away."
The prospect of interest rate increases in the U.S. is also
hurting the real, Mr. Galhardo said.
Concern about higher rates in the U.S. are affecting Brazilian
shares as well, traders said. Iron-miner Vale SA was one of the
biggest decliners in the Ibovespa on Monday, with a decline of 7.4%
to 13.19 reais.
State-controlled oil company Petroleo Brasileiro SA, or
Petrobras, declined 5.6% to 6.44 reais.
Write to Jeffrey T. Lewis at jeffrey.lewis@wsj.com
Subscribe to WSJ: http://online.wsj.com?mod=djnwires
(END) Dow Jones Newswires
September 28, 2015 18:05 ET (22:05 GMT)
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