Author Topic: Brazilian Real and Indian Rupee Stall Decline After GDP Figure Release  (Read 125 times)


  • Administrator
  • Hero Member
  • *****
  • Posts: 1785
    • View Profile
Brazilian Real and Indian Rupee Stall Decline After GDP Figure Release

Talking Points:
  • Brazilian QoQ GDP was 0.2% versus an expected 0.1%, year-over-year GDP was 1.0%
  • India saw robust growth, posting 8.2% in the most recent quarter
  • The data releases provide some buoyancy for troubled emerging market currencies amid crisis concerns
After consecutive days of weakness for emerging markets, the world’s fifth and seventh largest economies by GDP looked to stall a broader decline with positive GDP data. Due to their size, the two countries carry significant weight in the emerging market basket and their growth will surely generate some positive sentiment to counteract the issues facing the basket as a whole.

Brazil GDP Delivers near Target

As for the specifics, Brazil’s Q2 quarter-over-quarter GDP read in at 0.2%. A rather low figure for global standards. According to the World Bank, global GDP was 3.1% in 2017. Still, Brazils 0.2% GDP growth surpassed the expected 0.1%. Year-over-year GDP came in below the expected 1.1% at 1.0%. South America’s largest nation has been beleaguered by a trucker strike and political concerns as a presidential election looms. Coupled with domestic concerns, regional developments like Venezuela’s hyperinflation also worked to weigh down the Brazilian economy. Following the data release, the Brazilian real saw a reprieve from recent troubles and gained ground versus the dollar.

USD/BRL Price Chart 10-Minute Time Frame, August 30th – 31st

The real was up 0.73% versus the greenback, trading near 4.135 at the time of this article. The news is a welcome development that may help to temper losses by the real should emerging market concerns continue.

Indian GDP Surpasses All Expectations

Shattering global standards, Indian GDP read in at a staggering 8.2%. The figure marks the highest growth in two years, the strongest since the first quarter of 2016. The data also surpassed domestic expectations of 7.5% growth.

USD/INR Price Chart 10-Minute Time Frame, August 30th – 31st

Again, the strong figure generated a brief rally in the rupee versus the dollar. Moving forward, market participants will take note of the strong GDP figure but it may not be enough to completely stop the rupee’s decline. Although the rupee traded around 71.085 at the time of this article, Friday morning saw the rupee trade at its lowest level versus the dollar ever near 71.600.

Strong GDP Unlikely to Stop Broader Emerging Market Decline

Although both Brazil and India delivered robust results, the issue emerging markets face is larger than data releases can counteract. Trade wars, sanctions, and other headwinds have battered emerging markets. The steep decline in currencies like the Argentine peso and the Turkish lira have spread weakness and concern to countries that were otherwise on strong footing. Collectively, the recent weakness is enough to drag down even the strongest emerging markets like India.

« Last Edit: September 02, 2018, 10:08:43 am by FXshooting »

Share on Facebook Share on Twitter


Pay For Premium Forex Signals FXSHOOTING

Payment Premium Signals






Risk Disclosure: Fusion Media will not accept any liability for loss or damage as a result of reliance on the information contained within this website including data, quotes, charts and buy/sell signals. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible. Currency trading on margin involves high risk, and is not suitable for all investors. Trading or investing in cryptocurrencies carries with it potential risks. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Cryptocurrencies are not suitable for all investors. Before deciding to trade foreign exchange or any other financial instrument or cryptocurrencies you should carefully consider your investment objectives, level of experience, and risk appetite. Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures), Forex and cryptocurrencies prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn’t bear any responsibility for any trading losses you might incur as a result of using this data. Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.