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20 May 2014
Latin America EM Express: Brazilian real drops on geopolitical tensions
FXStreet (Łódź) - Geopolitical tensions stemming from the continuing Russian-Ukrainian conflict as well as the declaration of martial law in Thailand on Monday, weighed on emerging market currencies including the Brazilian real which fell on Tuesday by 0.4% to 2.2164 against the dollar early in Sao Paulo.
Economic data
Argentinian Unemployment rate disappointed on Monday, rising on a quarterly basis to 7.1% in Q1, from 6.4% in Q4 and considerably above forecasts of an increase to 6.7%.
Chilean annual GDP data on the other hand was positive, showing 2.6% growth in Q1, down from 2.7% recorded in Q4 but above expectations of +2.4%.
According to the BBVA Bancomer team of analysts: “Recent data validate both our GDP growth expectation for 2014 (at 3.4%) and our assessment of the necessity of further monetary stimulus during this year (policy rate at 3.25% in eop), although this will remain data dependent, particularly over CPI inflation figures.”
Technicals
At the moment of writing USD/BRL was up 0.02% at 2.2155.
On Monday the USD/BRL daily FXStreet Trend Index was strongly bearish, with the OB/OS Index oversold. RSI was at 41 at the last close, and has climbed to 51 so far today. Daily 2-StDev Volatility Bandwidth was shrinking at 98 pips, with ATR (14) shrinking at 191 pips. The 1D 200 SMA was at 2.3024, while the 1D 20 EMA was at 35.1975.
Economic data
Argentinian Unemployment rate disappointed on Monday, rising on a quarterly basis to 7.1% in Q1, from 6.4% in Q4 and considerably above forecasts of an increase to 6.7%.
Chilean annual GDP data on the other hand was positive, showing 2.6% growth in Q1, down from 2.7% recorded in Q4 but above expectations of +2.4%.
According to the BBVA Bancomer team of analysts: “Recent data validate both our GDP growth expectation for 2014 (at 3.4%) and our assessment of the necessity of further monetary stimulus during this year (policy rate at 3.25% in eop), although this will remain data dependent, particularly over CPI inflation figures.”
Technicals
At the moment of writing USD/BRL was up 0.02% at 2.2155.
On Monday the USD/BRL daily FXStreet Trend Index was strongly bearish, with the OB/OS Index oversold. RSI was at 41 at the last close, and has climbed to 51 so far today. Daily 2-StDev Volatility Bandwidth was shrinking at 98 pips, with ATR (14) shrinking at 191 pips. The 1D 200 SMA was at 2.3024, while the 1D 20 EMA was at 35.1975.