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This currency's collapse is astounding: Trader

More pain for Brazil?
More pain for Brazil?

The Brazilian real hit an all-time low against the U.S. dollar on Wednesday, the latest in a plague of bad news for the emerging market. And according to one currency strategist, there's no telling when the real problems will end.

Boris Schlossberg, managing director of FX strategy at BK Asset Management, said it's impossible to say how far Brazil's currency will fall.

"It's astounding, actually," Schlossberg said Tuesday on CNBC's "Trading Nation." "I remember just a few years ago a steak dinner in Sao Paolo was more expensive than a steak dinner in New York. That's how strong the real was. So it's just been an incredible fall in the currency's value."

Brazil has been hit hard by the steep plunge in commodities prices and the economic slowdown in China. The real has tumbled almost 35 percent against the dollar year to date.

Brazil's Finance Minister Joaquim Levy on Wednesday canceled a trip to New York after the currency plunge, according to a Reuters report. His scheduled appearance at the Foreign Policy Association will be replaced with a live video connection, instead.

Schlossberg said the country will also continue to face domestic problems, such as political turmoil, corruption and economic harm from the troubled oil giant Petrobras.

Read More Cramer: Petrobras is the 'world's biggest problem'

"It's just a toxic brew from which I would very much stay away," Schlossberg said Tuesday. "A lot is going to depend on whether Brazil is actually going to reform itself. Investors at this time should simply stand back and watch the show."

Earlier this month, S&P cut Brazil's credit rating to below investment grade. And Win Thin, head of emerging market currency strategy at Brown Brothers Harriman, said more downgrades for Brazil are on the horizon.

"I think most would argue that it's getting a little bit oversold, but no one wants to stick their neck out," Thin said in a phone interview with CNBC.

After hitting an all-time low Tuesday, the Brazilian real extended losses Wednesday even after President Dilma Rousseff's vetoes of bills that would increase public spending.

"Even the modest good news is not enough to turn around sentiment at this point," Thin said. "All these passages are lining up for more Brazilian weakness…. it's hard for me to see a positive outcome at this point."

Thin said he sees two downgrades, more from S&P and the real falling another 10 percent before Brazil starts to see any improvement.

Read More Where next for Brazil as real hits new record low?

Stacey Gilbert, head of derivative strategy at Susquehanna, said the options market also signals more volatility for Brazil out into March 2016.

The iShares MSCI Brazil ETF, EWZ, has fallen more than 40 percent this year. And options traders betting on a 20 percent probability that EWZ could fall another 25 percent, Gilbert said, as well as similar probability of 25 percent upside as well.

"Any way you slice it, the market is still pricing in that there is a lot of risk, a lot of volatility in Brazil," Gilbert said Tuesday on "Trading Nation."

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—Reuters contributed to this article.