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FX round-up: Brazilian real crushed, Mexican peso under pressure

By Alexander Bueso

Date: Thursday 18 May 2017

FX round-up: Brazilian real crushed, Mexican peso under pressure

(ShareCast News) - The spotlight shifted towards emerging markets on Thursday, with the worsening political situation in South America's largest economy hogging the headlines.
A report in O Globo sent the greenback surging against the Brazilian real by 6.79% to 3.35.

Credit default swaps on the country's debt also gaped wider after the daily said a secret recording showed President Michel Temer authorising a bribe for a leading oppostion politician - now jailed - who played a key role in the ouster of his predecessor, Dilma Rousseff.

Mexico's peso and India's rupee were also under pressure.

American trade representative Robert Lighthizer formally notified Congress on Thursday of the White House's intention to renegotiate the North American Free Trade Agreement.

That set wheels in motion for talks with Mexico to start following 90 days of consultations with US lawmakers.

However, while the Greenback was higher by 0.66% versus the peso it was 0.09% lower against the Canadian Loonie at 1.3590.

From a bird's eye view, as of 1615 BST the US dollar spot index was edging higher by 0.04% to 97.61.

Versus the rupee, the dollar gained 1.07% to 64.85.

The dollar was seeing a modest rebound against the major currencies meanwhile, rising 0.23% to 1.1107 versus the yen while the single currency was 0.32% lower to 1.1124.

Cable was a notable exception, rising 0.31% to 1.3007 on the heels of a much stronger-than-expected reading on UK retail sales for April.

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