Brazil Markets Riled as Fresh Data Adds to Budget Concerns
- Real is the worst performing currency in the world this week
- Data show May primary budget deficit was deeper than expected
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Brazilian markets suffered additional losses Friday as fresh data on the country’s budget deficit fueled concerns about President Luiz Inacio Lula da Silva’s commitment to shoring up its fiscal accounts.
Traders dumped the Brazilian real and pushed interest rate swaps higher, suggesting they expect the central bank to hike borrowing costs despite the insistence of policymakers that they are not considering such a move. Friday’s 1.4% decline for the real adds to a selloff that has made it the worst-performing currency in the world this week.