USD/BRL Volatility Surges on Moro Resignation
Brazil’s Moro Resigns, USD/BRL Action Talking Points:
- Brazilian Justice Minister Moro Resigns
- USD/BRL up over 40 percent YTD
- Country continues struggle with COVID-19
Sergio Moro, Brazil’s Justice Minister and powerful far-right figure, resigned Friday after clashing with the country’s President over the recent firing of the head of Brazil’s federal police force. The resignation of the former judge deals a heavy blow to the Bolsonaro administration at a time when the country is already having trouble with corruption and the current COVID-19 pandemic. Brazil’s currency, the Real, has been hammered this year, down over 40 percent versus the US Dollar.
USD/BRL Price Chart (15-Min)
Source: IG Charts
Moro’s exit isn’t the only high-profile fallout in the administration recently. President Bolsonaro fired his health minister last week after clashing with the country’s top health official over the national strategy to fight the spread of COVID-19. Brazil has over 50,000 cases of coronavirus as of Friday morning according to Johns Hopkins University.
Brazil’s Real has significantly underperformed against other emerging market currency peers this year as the political turmoil in the country continues. The country’s central bank will meet early next month where they are expected to lower interest rates from an already record low of 3.75 percent.