The Brazilian real fell from its two-week height on Thursday against the U.S. dollar after Moody's Investors Service slashed the credit rating of the South American nation, Bloomberg reports.
The credit rating of the country hosting Latin America's largest economy dropped to stable from positive because of growing debt and the reduced pace of growth. The Banco Central do Brazil cut this year's economic growth outlook this week to 2.5 percent from 2.7 percent. The Wall Street Journal reports investors are growing increasingly concerned about the impact of the government shutdown in the U.S.
"People in the market think BRL2.20 to BRL2.30 is the range the central bank is shooting for these days, so when the real gets below BRL2.20, company treasuries start buying to stock up on dollars to make their payments abroad," director Luiz Carlos Baldan with Fourtrade brokerage in Sao Paulo told The Wall Street Journal on Thursday. "The big worry is how much the situation there will affect the economy in the U.S. and in Brazil."
The currency of the South American nation dropped 0.3 percent against the world's reserve currency on Thursday after touching its top value since September 18.
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