Brazil’s real strengthened after the central bank appeared to rule out easing monetary policy before budget cuts are in place and as commodities advanced, boosting the outlook for the country’s raw-material exports.
The currency strengthened 1.4 percent to 3.3445 per dollar at 11 a.m. in Sao Paulo. Swap rates on the contract maturing in January 2018, a gauge of expectations for interest-rate moves, rose 0.19 percentage point, the most since March, to 12.72 percent.
The central bank on Tuesday published its quarterly inflation report, the first under new chief Ilan Goldfajn. The bank forecasts above-target inflation next year and sees no room to ease monetary policy before budget cuts are in place, it said.