We have previously examined the U.S. dollar’s early winter push to a 14-year high and more recently its setback below the 100.00 level. One of the more surprising recent developments was the Brazilian real’s mid-March push to its highest level versus the greenback since May 2015.
In one sense, the real’s gain is understandable in light of the removal of the country’s president on corruption charges. That move prompted the currency’s big 2014 to 2016 breakdown versus the dollar. Last year’s resolution of the political situation accompanied the real’s comeback.
This is good news for U.S. ag producers and exporters, since the real advance raises the cost of Brazilian soybeans, grains and meat versus U.S. products. Brazil’s current meat scandal may change things, but real strength is helping U.S. exports now.