Question

What is the exchange rate fluctuations between the USA and Brazil for the last 20 years?

How is relationship trade between both countries?

What major changes effected the trade between them?

Answer 1

Brazil is one of the fastest-growing economies in the world and ranked at 9th largest economy by nominal GDP and is the largest of Latin America. It is a mixed economy and Service sector contribute around 67% followed by the industry sector @ 27%. Agribusiness contributes to trade balance and major export includes soybeans, iron ore, crude oil, sugar, and automobiles.
It’s top export counties are China, the USA, Argentina, The Netherlands and Germany, and its import majorly from China, USA, Germany, and South Korea. Brazil enjoys positive trade Balance means its export is more than imports.
1.Fx Rate Fluctuation: Brazil currency is Brazilian Real and USA currency is US Dollar. Brazilian Real is subdivided into 100 centavos.
During 1994-95 Real gained unexpectedly against the USD due to large capital inflows and it attains it’s maximum dollar value ever about $1.2, between 1996-98 exchange rate is tightly controlled by Centra Bank of Brazil dropping nearly 1:1 to about 1.2:1 by the end of 1998. In 1999 deterioration in the international financial market forced Central Bank to float the exchange rate because of which there was the devaluation of Real to USD to a rate almost 1 Real=$2. From 1999-2002 Real followed downward path mostly due to fear of government default on its debt but after 2005 when crisis subsided value of Real to USD remain upwards and by 2007 exchange rate was US$0.50.
Exchange rate as of 2015 was R4.05 to 1$ which gradually recovered to 3R per USD by 2017.
Currently, in Sep’19 it is trading at 4.09 to per USD.
2.Relation with the United States: both countries enjoy robust political and economic relations. Both countries have extensive collaboration in the field of education, science, and technology. Unites States is the second-largest trading partner for Brazil and as per 2018 data total trade between two countries was $70.7bn and the USA has a trade surplus of $8.3bn. The USA had invested $68bn in Brazil as of 2017 and both countries conduct regular exchange on trade facilitation. In 2019 both countries agreed to establish a Unites States-Brazil Energy Forum to facilitate energy-related trade investment.