Brazil Real Fluctuates as Impeachment Vote Nears and Oil Slides

Brazil’s real reversed earlier gains as oil prices plunged, offsetting investor optimism as the months-long efforts to impeach President Dilma Rousseff drew to a close.

The currency slid 0.2 percent to 3.2474 per dollar as of 12:51 p.m. in Sao Paulo after earlier rising as much as 0.6. Crude oil declined 3 percent after a government report showed that U.S. inventories rose last week by more than projected. Bloomberg Commodity Index dropped 1 percent. Raw materials make up more than half of Brazil’s exports.

Brazil’s financial markets have rallied this year on prospects that Temer, once he formally takes over, will win support for legislation to cap a nearly-record budget deficit and overhaul the pension system. After plunging 33 percent in 2015 as the country lost its investment-grade credit rating, the real is the world’s best performing currency in 2016 after high interest rates attracted investors hunting for better yields and amid speculation that a new government will help pull the country out of its deepest recession in a century.

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