Brazilian unemployment rises to 66 month high and Real gets crushed

Brazilian Real in a free fall ride after it surpassed its previous all-time low against Dollar this week. Last time Real was above 4 per Dollar was back in 2002, when default by Argentina equally gripped its neighbor.

Real today traded as low as 4.248 against Dollar, from which it has risen sharply to current 4.19 per Dollar. Chances are likely that central bank might have sold Dollar to stem the fall. Real has been falling since FED kept rates on hold, which according to many central bankers in emerging markets have actually increased  uncertainty and led to continued rout.

Real has fallen more than 33% in last six months alone against Dollar and traders believe bottom is yet to come. A drop till 4.5 is very much likely.

On the other hand Brazil's economy is nowhere getting better, latest report shows that Unemployment has actually risen to 5 and half year high at 7.6% and Brazil is bracing for its worst recession in 25 years.

Forecasts for Brazil's growth is being revised to the downside at every assessment. Latest report suggests economy is set to contract by 2.7% this year and 0.8% in next.