The news of late has been focused primarily on the Federal Reserve and its decision to leave interest rates at zero for the time being. China has also been in the headlines as a major cause of global turmoil and wild market fluctuations.
But currency watchers have not lost sight of other world situations and are now turning to the crisis unfolding in Brazil, the world’s eighth largest economy.
The Brazilian Real hit an all-time low against the U.S. dollar on Wednesday, the latest in a series of bad news for the emerging market. According to one currency strategist, this is only the beginning of their troubles.
"It's astounding, actually," said Boris Schlossberg, managing director of FX strategy at BK Asset. "I remember just a few years ago a steak dinner in Sao Paolo was more expensive than a steak dinner in New York. That's how strong the real was. So it's just been an incredible fall in the currency's value."
Rio Hit Hard
Brazil has been hit hard by the sudden dive in commodities prices and the economic slowdown in China. The real has tumbled almost 35 percent against the dollar year to date and the Brazilian government revised its 2015 economic recession estimate to 2.44 percent from 1.49 percent, foreseeing a narrowing more in line with market expectations. Brazil has kept its central government primary surplus goal of 5.8 billion reals ($1.43 billion) for 2015.
S&P cut Brazil's credit rating to below investment grade at the beginning of the month and analysts are predicting more downgrades for Brazil in the future.