The Brazilian real dropped in value in early trading Thursday, as the U.S. dollar strengthened worldwide due to the increasing worries about economic growth in China and Europe, The Wall Street Journal reports.
The real was trading at BRL1.8215 to the dollar early in the session, a change from the Wednesday close of BRL1.8184, according to Tullett Prebon, an analyst from FactSet.
"The Brazilian market is taking some of its cues from Europe and China," Jose Carlos Amado, a trader at Sao Paulo's Renascenca brokerage, told the Journal. "Broadly speaking, we are expecting a modest trend toward strengthening of the dollar against the real because of this tendency toward less exposure to emerging markets."
There was a significant drop in industrial output in Germany and France that contributed to the decline in the real, as this decrease, coupled with negative data out of China, pushed the value of the currency lower, according to the news outlet.
Bloomberg reports that the drop in the value of the real was also due to speculation concerning the Brazilian central bank seeking to keep the currency weaker as a way to avoid an influx of cheap imports.
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