Brazil Industrial Output Drops

Brazil’s real declined as industrial production contracted more than forecast, highlighting the challenges President Michel Temer still faces as he tries to pull the country out of its worst recession in a century, Bloomberg reported.  The real fell 0.2% to 3.209 per dollar in Sao Paulo. Industrial output declined 5.2% in August from a year earlier. The drop was steeper than the 4.8% contraction analysts surveyed by Bloomberg had forecast, overshadowing improving sentiment over the government’s ability to win support for measures aimed at restoring growth. Brazilian assets, which have led global gains this year on speculation the new government can pull Latin America’s biggest economy from its worst recession in a century, had retreated in the past month on concern Temer would struggle to make good on pledges for economic reforms. His administration is betting a spending cap bill will be easily approved in the Lower House after the result of municipal elections, O Globo and Valor Economico newspapers reported.