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Brazil real drops on weaker oil futures

Brazil's real fell on Thursday on speculation that President Michel Temer’s government could face more difficulty than expected in passing important austerity measures in Congress.

Temer's proposal to reform the country’s social security system is still controversial and needs a two-thirds vote to approve the bill in a full vote in the Brazil's lower house of Congress.

"The government has already been forced to negotiate intensely at this point and made multiple concessions," said Miriam Tavares, a foreign exchange director at AGK brokerage.

Brazilian real weakened as much as 1 percent while other Latin American currencies also fell due to falling commodity prices. Colombia's peso fell 1.6 percent on speculation that oil futures fell as OPEC and non-OPEC oil producers looked likely to extend their agreement to limit supplies beyond its June expiry to help clear a glut, three OPEC delegates said on Thursday, downplaying the chance of additional steps such as a bigger cut. This news seems to make investors concerned about global oil supply glut.

Coffee traders follow news on Brazil real because the volatility of this currency has an key impact on the trend of Arabica coffee markets.

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