The iShares MSCI Brazil Capped ETF (NYSEArca: EWZ) is down more 39% year-to-date, which is to say it has been an eventful year for the largest Brazil exchange trade fund. Confounding investors is that the near-term outlook for Brazilian stocks is murky at best and volatility (and controversy) there do not appear to be ebbing.

Multiple factors are dragging on the Brazilian economy. Unemployment rose to 7.9% in September from 4.7% in October last year. Inflation has jumped over 10% for the first time since 2002. The budget deficit has widened to 9.5% of GDP. Additionally, lower commodity prices, diminishing consumer credit boom and a corruption scandal at state-run oil giant Petroleo Brasileiro have all weighed on the economy. [Corruption Probe Plagues Brazil ETF]

Brazil’s real is in a wicked slump against against the dollar and resides at multi-year lows against the greenback. The real could face increasing pressure as global investors price in the rising odds of additional credit downgrades for Brazil. [Bad News for Brazil ETFs]

The situation surrounding a potential impeachment of Brazilian President Dilma Rousseff has been a problem as well as investors try to sort out if regime change is really coming to Latin America’s largest economy.

“A controversial congressional vote that stacked an impeachment committee with opponents of President Dilma Rousseff has been found to be legitimate by the country’s Supreme Court justice which suspended proceedings against her last week,” according to a Seeking Alpha Brief. “The move comes after Fitch downgraded Brazil’s credit rating to BB+, becoming the second major credit rating agency to strip the country of its investment-grade status.”