Brazil's real and Chilean peso plummet to new multi-year lows after commodities plunge

The Chile peso and Brazilian real fell to new multi-year lows on Friday 24 July as the commodities slump weakened the Latin American economies' growth prospects.

Brazil's inflation is at an 11-year high while the economy has seen its sharpest contraction as per the latest data. Accelerating inflation is forcing the central bank to keep increasing the Selic rate, further weakening growth prospects.

The USD/BRL pair rallied to 3.3393, a new multi-year record, from the previous close of 3.2860.

After hitting a record of 3.3155 in January, the pair had been moving sideways keeping below the 3.20 mark, but this month's move has taken it to a new high which happened on Friday.

Brent Crude Oil for spot delivery plunged to a near four-month low of $54.75 (£32.30, €50) on Friday.

Spot gold fell 1.2% on the day to as low as $1,076.70, getting closer to the 20 July five-year low of $1,072.93.

Brazil funded 11.5% of its GDP from export revenues in 2014 as per the World Bank statistics.

The Brazilian GDP shrank by 1.6% year-on-year in the first quarter of this year, which is the fourth consecutive contraction.

For Chile, the share of exports to its GDP was 33.8% last year, indicating the likely impact of the slump in global demand on its economy and currency.

USD/CLP has rallied to 660.80, its highest since early 2009, from the proviso close of 656.85. The Chilean peso has fallen more than 3.4% this month.