Moody's: Macro Profile for Brazil's banking system lowered to 'Moderate-'

"Macro Profile for Brazil´s banking system has been lowered to Moderate -, from Moderate, reflecting the recent rise in political turmoil, which increases the country's susceptibility to event risk," Moody's Investors Service announced on Tuesday.

Key quotes:

• The ongoing corruption investigations surrounding President Michel Temer's administration and uncertainty regarding political continuity after his term ends in 2018, if not sooner, could negatively impact the country´s incipient economic recovery and hinder medium-term growth prospects.
• The macro profile for Brazil (Ba2 negative) benefits from the country's large and diversified economy and strong international reserves, and the improved effectiveness of monetary policy.
• However, the country's economic performance remains weak following two years of recession.
• Asset risks have remained relatively contained despite the depth and length of the country's recession.

The USD/RBL pair rose above the 3.16 and is now trading at 3.1625, up 0.5% on the day.