Brazil's Real Falls To All-time Low After S&P Downgrades Country's Debt

The Brazilian real fell to an all-time low of 3.90 real to the dollar Thursday after Standard & Poor's Ratings Services downgraded Brazilian sovereign debt into junk territory late Wednesday. Doug Borthwick, the head of foreign exchange at Chapdelaine & Co., said the real's move was "a kneejerk reaction that may see a pullback during the day today." The currency has steadily weakened over the past year amid falling commodity prices and a corruption scandal at the state-owned Petrobras. The prospect of higher interest rates int he U.S. has caused the dollar to strengthen against emerging-markets currencies, a category that includes the real. The currency recently traded at 3.87 to the dollar, down 2.5% from its level late Wednesday in New York.