New details regarding Brazil’s tenuous grasp on an investment-grade credit rating are emerging and those details could limit the near-term upside for EWZ and rival Brazil ETFs. On Tuesday, Standard & Poor’s pared its outlook on Brazil’s rating to negative from stable. S&P did not shy away from noting that could lower Brazil’s sovereign debt rating to junk territory. The ratings agency currently rates Brazilian debt BBB-, the lowest investment grade. [Bad News for Brazil ETFs]

SocGen said the real “is arguably the most vulnerable emerging-market currency at this point, facing rapidly worsening fundamentals on top of a fragile external backdrop,” reports Bloomberg.

Investors looking to profit from the real’s slump can consider the actively managed WisdomTree Bloomberg U.S. Dollar Bullish Fund (NYSEArca: USDU). USDU measures the dollar against a basket of foreign currencies, including some emerging markets fare such as the real.

WisdomTree Brazilian Real ETF