On Friday, the 23rd of August 2019, world’s 9th largest economy by nominal GDP (gross domestic product) and 8th largest by purchasing power parity, Brazil, Latin America’s No. 1 economy faced off a mass-scale sell-off pressure on its stocks and currency, as an intensified trade row between United States and China, which had every possibility to send emerging markets into an imminent recession, diversified broadly on Friday (August 23rd).
Aside from that, followed by US President Donald Trump’s call for US-businesses to seek for alternative supplies instead China amid a 5%-10% tariff hike on US imports, China-dependent economy of Brazil, the 9th largest in the world as beforementioned, had went through a ravaging rampage on Friday (August 23rd), while Brazilian Real had drowned to its lowest level against American dollar in a year to 4.12 Real per US dollar, a level never seen since on September 18th 2018.
Meanwhile, the benchmark Bovespa stock market shrugged off 2.34 percent of its earlier gains, wrapped up Friday’s (August 23rd) market at its lowest daily closure since early June. Adding that a growing outcry over Sino-US trade warfare might have started to take death tolls over Amazon rainforest, an independent market strategist at a bank in Sao Paulo said, ‘Emerging markets are under pressure, and China’s announcement to impose tariffs on U.S.
imports doesn’t help at all. The material impact is small, but the reputational image is impacted. Brazil has to better manage the situation to avoid spillover effects. ”