09/04/10 – Brazil´s real rose for the fourth time this week as gains in global stocks boosted risk appetite and higher commodity prices improved the outlook for exports.
The real strengthened 0.5 percent to 1.7727 per dollar at 11:22 a.m. New York time, from 1.7809 yesterday. The gain pared the currency´s weekly decline to 0.5 percent.
The Euro Stoxx 50 index jumped 1.3 percent to 2,981.10. The Reuters Jefferies Commodity index advanced 0.2 percent to 275.80. Brazil is the world´s largest exporter of beef, orange juice, coffee and sugar.
“The environment is more favorable for the real with commodities going up and lower risk aversion,” said Luciano Rostagno, chief Brazil strategist for CM Capital Markets, a Madrid-based brokerage. Strength in the local stock market and sales of bonds by Brazilian companies abroad also support the currency, he said.
The Bovespa stock index has gained 0.8 percent so far this week and is up 4.5 percent this year. Itau Unibanco Holding SA, Brazil´s biggest non-government lender, sold $1 billion of 10- year bonds yesterday, according to data compiled by Bloomberg. Banco Industrial e Comercial SA and Banco Panamericano SA are arranging upcoming dollar bond sales, said people familiar with the transactions.
“The outlook for foreign inflows is positive and will keep supporting the real,” said Paulo Fujisaki, foreign exchange analyst at Socopa Corretora, the brokerage unit of Banco Paulista SA in Sao Paulo. “Brazil will get even more attractive after interest rates go up,” he said in a telephone interview.
Interest-rate futures contracts forecast the central bank will raise the benchmark Selic rate by at least 0.5 percentage point to 9.25 percent on April 28.
In the overnight interest rate futures market, the yield on the contract due January 2011 rose four basis points, or 0.04 percentage point, in Sao Paulo to 10.5 percent, its highest level since March 16. | 