The Crazy Week Of The Brazilian Real

• The Brazilian Real had an interesting week, to say the least.
• The currency hit an all time low on Tuesday, and beat the record again on Wednesday. It then started to recuperate on Thursday and early Friday.
• However, the bills are once again losing value on Friday afternoon.

The Brazilian Real is once again losing value on Friday afternoon. The currency is down 0.75 percent to 0.2521 U.S. Dollars (which means one U.S. Dolar is worth 3.964 Reais), after a volatile week.

On Tuesday, the currency hit a historic low below 4 reais per U.S. Dollar, driven by the political turmoil in Brazil, the generally bad economic environment, and the S&P downgrade, among other factors. On Wednesday, the notes pushed the boundaries again, establishing a new all time low of 4.2447 reais to the dollar.

Related Link: Latin American ADRs Getting Slaughtered, Brazilian Real And Crude Continue To Tumble

For the first time in more than a week, the Real strengthened on Thursday, after the president of the Central Bank implied he would be willing to use Brazil’s foreign reserves to preserve the currency’s value. The Real closed at 3.9366 on Thursday afternoon.

Also driving the surge was Central Bank’s auction of currency-swap contracts, which “allow local businesses to hedge against the weakening real,” a MarketWatch article explains.

On Friday morning, the Real continued to rally. However, in the afternoon hours, it lost all of the ground gained during the morning, and is now down roughly 0.75 percent.

Other Decliners

The Sao Paulo Stock Exchange is also down on Friday afternoon. The Bovespa index fell more than 1.1 percent over the session, to 44,780.12 points. Over the past five days, the index fell almost 5.3 percent.

Many major Brazilian stocks are also tumbled on Friday:

State-owned Petroleo Brasileiro SA - Petrobras (ADR) PBR lost 0.36 percent

Vale SA (ADR) VALEfell more than 3.2 percent

Gol Linhas Aereas Inteligentes SA (ADR) GOL declined over 3.6 percent

Banco Bradesco SA (ADR) BBDtumbled about 2 percent

Itau Unibanco Holding SA (ADR)ITUB plunged about 1.7 percent

Disclosure: Javier Hasse holds no positions in any of the securities mentioned above.