Brazilian Real falters ahead of Brazil’s equity market

By Emerging Money>,

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Rich Ross, highlighted the concerns in the Brazilian Real earlier on the site and we have seen predictable follow through from the equity market in Brazil with the currency move.

[caption id="attachment_62393" align="alignright" width="220" caption="Brazil's Bovespa stock exchange in Sao Paulo"] Image courtesy Evandro Miquelito: [/caption]

Is it a chicken or egg story?   -  It's both.

Currency weakness is often a "tell" on the equity market.  Technical analysis is never the story behind the move, it's how the move is translated.

Emerging market equities are beholden to their underlying currencies.  Bovespa suffered today as underlying "domestic" names like retailers, infrastructure and banks bore the brunt of this move, and always will.

 An easy way to gain exposure to Brazilian equities (short or long) is through the iShares MSCI Brazil Index Fund ( EWZ , quote )

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

This article appears in: Investing , Stocks
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