Brazil is gearing up for an impeachment vote -- here's what's happening in FX

Good morning!

The Brazilian real is little changed at 3.4723 per dollar as the Brazilian senate moves forward with president Dilma Rousseff’s impeachment process.

The senate will be voting on Wednesday to decide whether to suspend Rousseff and put her on impeachment trial. They will reportedly debate for 10 hours and end with a vote at 7 p.m. local time, according to Bloomberg.

If Rousseff is suspended, Vice President Michel Temer will take the helm. However, some folks are worried that Temer will not be able to live up to investor expectations.

“If anyone thinks getting rid of Rousseff will solve Brazil’s problems, the developments and U-turns this week (too numerous to list here) should make them think twice,” wrote Marc Chandler, the global head of currency strategy at Brown Brothers Harriman, in a note to clients.

As for the rest of the world, here’s the scoreboard:

  • The Japanese yen is stronger after a two-day slump by 0.5% at 108.74 per dollar. “The greenback initially extended its gains marginally in early Tokyo before the selling pressure emerged. The price action reinforces the importance of the JPY109.50 resistance area,” wrote Chandler.
  • The British pound is little changed against the dollar at 1.4435 after some less than stellar data. Manufacturing production rose only by 0.1% in March, below expectations of a 0.3% increase, and industrial production only rose 0.3% for the month of March, below expectations of a 0.5% increase.
  • The Thai baht is little changed at 35.260 after the Bank of Thailand kept its key interest rate unchanged at 1.50%, as expected. The BOT said that “the global economic recovery remained fragile” and that the Thai economy “faces greater downside risks on the domestic front.”
  • The Russian ruble is stronger by 0.6% at 65.9167 per dollar. The ruble has surged by about 20% over the past three months, the most out of all the major currencies, on the heels of rising oil prices.
  • The US dollar reversed some of its recent gains, with the dollar index down by 0.3% at 94.03.

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