Brazil’s Real Rises to One-Month High as Political Concern Eases

Brazil’s Real Rises to One-Month High as Political Concern Eases

By Paula Sambo

10:51 AM BRT
April 9, 2015

(Bloomberg) Brazil’s real climbed to a one-month high as eased tension with Congress added to speculation that President Dilma Rousseff will succeed in paring deficits and preserving the nation’s investment-grade status.

The real advanced 0.6 percent to 3.0313 per dollar at 10:22 a.m. in Sao Paulo, the strongest level on a closing basis since March 5.

The local currency rallied as party leaders in Brazil’s ruling coalition agreed to support the government’s plan to narrow the budget deficit after Vice President Michel Temer took over negotiations with lawmakers. They also pledged to avoid bills that would reduce revenue or increase spending.

“On the back of a milder political scene, the dollar should keep its downward trend versus the real,” Joao Paulo de Gracia Correa, a currency trader at Correparti Corretora de Cambio in Curitiba, Brazil, said in a note to clients.

Swap rates on the contract maturing in January 2017, a gauge of expectations for changes in Brazil’s borrowing costs, decreased 0.03 percentage point to 12.95 percent, the lowest since March 3.

Leave a Reply

This site uses Akismet to reduce spam. Learn how your comment data is processed.