Brazil’s real followed a rally in major currencies against the dollar as global appetite for riskier assets overwhelmed concerns about the outlook for Latin America’s largest economy amid political strife.
The real rebounded from the biggest slide since 2011 as disappointing economic reports out of China and the U.S. spurred wagers the Federal Reserve will refrain from boosting interest rates to avoid a further slowdown. The speculation overshadowed concern over political turmoil in Brazil, which is headed toward the longest recession since the 1930s amid a widening corruption scandal.
“Expectations of a later Fed hike are helping higher-yielding assets such as the real,” said Georgette Boele, an Amsterdam-based strategist at ABN Amro Bank NV. “The situation in Brazil remains a challenging one at best. When investors move back to fundamentals and political challenges, the real could get under pressure again.”
The real climbed 1 percent to 3.8544 per dollar at 11:34 a.m. in Sao Paulo, joining gains in all 16 major currencies against the dollar.Swap rates on the contract maturing in January 2017, a gauge of expectations on Brazil’s interest-rate moves, fell 0.06 percentage point to 15.74 percent.
Brazil Energy Insight 
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