Record Retail Sales Rise Helps Lift Mood In Brazil

By Steve Wynne-Jones
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Record Retail Sales Rise Helps Lift Mood In Brazil

Brazil's real reversed declines to trade higher on Thursday after a record reading on retail sales, although worries lingered about the country's public finances.

Data showed Brazilian retail sales rose to their highest on record in August, as economic activity continued to recover from the worst of the nationwide lockdown measures from earlier this year.

This comes after a report earlier in the week which showed a pick-up in the Brazil's services sector during September.

Despite recent economic green shoots, investors worried about a new fiscal package, known as Renda Cidada, exceeding the government's spending limit after a volley of mixed information.

"The (Brazilian) government's intention to create a new social welfare program poses additional risk to the trajectory of the public accounts," economists at Credit Suisse noted.


"Despite the government's decision to revise the proposal after strong backlash, the source of funding for the new program remains uncertain. The main concern is the observance of the spending cap."

Currency Movements

Elsewhere, Mexico's peso rose 0.3%, extending gains to a second day. Investors were optimistic of a new infrastructure investment plan unveiled by the government earlier in the week, worth nearly $14 billion.

Argentina's peso steadied after hitting a record low in the previous session.

Colombia's central bank board could still use whatever tools at its disposal to buoy up the economy amid fallout from a long coronavirus lockdown, a board member said on Thursday. The Colombian peso added 0.1%.

© 2020 European Supermarket Magazine – your source for the latest retail news. Article by Stephen Wynne-Jones. Click subscribe to sign up to ESM: The European Supermarket Magazine

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