(Bloomberg) -- Brazil's currency and stocks declined, reversing gains earlier in the day, after a poll of likely voters showed the U.S. presidential election is still too close to call, fueling concern that a victory for Republican candidate Donald Trump would hurt exporters.
The real slid 1.2 percent to 3.2317 per U.S. dollar Tuesday in Sao Paulo after rising as much as 0.5 percent earlier. The Ibovespa stock index fell 2.5 percent to 63,326.42, erasing an advance of as much as 0.6 percent. Mexico's peso also reversed gains, declining 1.7 percent, the most among major currencies worldwide.
An ABC News poll on Tuesday suggested Republican candidate Trump has 46 percent of the support of likely voters, ahead of Hillary Clinton's 45 percent. This is the first time Trump has led the poll since May, according to ABC. With the U.S. election just a week away, traders are trying to anticipate the impact a Trump victory would have on assets. The U.S. is Brazil's second-biggest trading partner, and Trump has said he'd work to protect American workers threatened by imports.
"The possibility of Trump wining the U.S. election is worrisome for the world and for Brazil, as the country could suffer from protectionist measures from the U.S.," said Pedro Galdi, a partner at the equity research firm Upside Investor, said from Sao Paulo.
The poll offset earlier optimism on the global economy as China's factory gauge rose to the highest since July 2014, led by new orders. Rebounding commodity prices added to positive investor sentiment regarding Brazil's attempts to pull out of two years of recession.
The nation's assets are already among the world's top performers this year on bets that President Michel Temer can get public finances in order. The Senate is preparing to examine the spending cap bill that is a key plank in his efforts to curb a budget deficit which cost the country its investment-grade rating. The government said Tuesday it collected 50.9 billion reais ($15.8 billion) in taxes and fines as part of an amnesty law for undeclared assets held abroad.
"We should brace for more volatility until Election Day," said Ignacio Crespo, an economist at Guide Investimentos in Sao Paulo.
Swap rates on the contract maturing in January 2018, a gauge of expectations for interest-rate moves, gained 0.04 percentage point to 12.25 percent.
--With assistance from Denyse Godoy and Ney Hayashi To contact the reporters on this story: Paula Sambo in Sao Paulo at psambo@bloomberg.net, Aline Oyamada in Sao Paulo at aoyamada3@bloomberg.net. To contact the editors responsible for this story: Brendan Walsh at bwalsh8@bloomberg.net, Jessica Brice, Sebastian Boyd
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