The world’s best currency rally has lost its mojo.
Brazil’s real has been falling in recent weeks, and is now barely hanging on as 2016’s top performer. Bears are reemerging as a fractured congress, feuding politicians and a stew of corruption dims hopes President Michel Temer will succeed in pushing through reforms to shore up the budget, restore business confidence and pull the country out of its deepest recession in a century.
It wasn’t supposed to be this way. The currency soared 23 percent in the first half of the year on bets then-President Dilma Rousseff would be ousted and a new administration would get the country back on track. But as impeachment turned from wishful thinking into reality — with Rousseff officially thrown out last month — early hiccups in the new government and a dim outlook for legislative measures sent the real lower, making it the second-worst performer in Latin America since it reached a 13-month high on Aug. 10.