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Brazil Real Reaches Highest Since 2000 on Benign Inflation Data
Posted by regli
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Brazil Real Reaches Highest Since 2000 on Benign Inflation Data July 13, 2007 06:36PM |
Admin Registered: 1 year ago Posts: 4,338 |
Brazil Real Reaches Highest Since 2000 on Benign Inflation Data
http://www.bloomberg.com/apps/news?pid=20601086&sid=aNWpBwDzjIzQ&refer=latin_america
By Adriana Brasileiro and Carla Simoes
July 13 (Bloomberg) -- Brazil's real rose to its highest in almost seven years after a report showed inflation slowed more than forecast, prompting traders to step up bets on interest-rate reductions.
The real rose 0.6 percent to 1.8620 per dollar at 3:39 p.m. New York time, the strongest since October 2000. Brazil's inflation rate, as measured by the Getulio Vargas Foundation's IGP-M index, fell to 0.15 percent in the 10 days through July 10, less than the 0.18 percent median forecast in a Bloomberg survey of 18 economists.
Central bankers have lowered the benchmark lending rate by 7.75 percentage points over the past two years to a record low of 12 percent to bolster economic growth. Policy makers are scheduled to meet again next week.
``We see another cut of 50 basis points and three smaller cuts of 25 by the end of the year,'' said Carlos Cintra, manager of the fixed-income trading desk at Rio de Janeiro-based Banco Prosper SA. ``That outlook is luring people to bonds that still offer good returns.''
The currency held on to gains even after the central bank bought dollars twice today in a bid to cool a rally that has boosted the value of the real almost 15 percent this year. The real is the best performer among the 16 most actively traded currencies tracked by Bloomberg.
``Flows are just really strong because all the fundamentals are so attractive now,'' said Mario Battistel, foreign-exchange director at Sao Paulo-based brokerage Corretora Novacao. ``The central bank intervened more strongly today to prevent the real from strengthening to a rate too close to the psychologically- important level of 1.80.''
Brazil's central bank bought dollars for 1.8726 reais apiece at an auction in the morning session today and again for 1.8660 in the afternoon. The bank has purchased dollars every day for the past year.
The yield on Brazil's benchmark zero-coupon bonds due January 2008 was little changed at 11.08 percent, according to Banco UBS Pactual SA.
http://www.bloomberg.com/apps/news?pid=20601086&sid=aNWpBwDzjIzQ&refer=latin_america
By Adriana Brasileiro and Carla Simoes
July 13 (Bloomberg) -- Brazil's real rose to its highest in almost seven years after a report showed inflation slowed more than forecast, prompting traders to step up bets on interest-rate reductions.
The real rose 0.6 percent to 1.8620 per dollar at 3:39 p.m. New York time, the strongest since October 2000. Brazil's inflation rate, as measured by the Getulio Vargas Foundation's IGP-M index, fell to 0.15 percent in the 10 days through July 10, less than the 0.18 percent median forecast in a Bloomberg survey of 18 economists.
Central bankers have lowered the benchmark lending rate by 7.75 percentage points over the past two years to a record low of 12 percent to bolster economic growth. Policy makers are scheduled to meet again next week.
``We see another cut of 50 basis points and three smaller cuts of 25 by the end of the year,'' said Carlos Cintra, manager of the fixed-income trading desk at Rio de Janeiro-based Banco Prosper SA. ``That outlook is luring people to bonds that still offer good returns.''
The currency held on to gains even after the central bank bought dollars twice today in a bid to cool a rally that has boosted the value of the real almost 15 percent this year. The real is the best performer among the 16 most actively traded currencies tracked by Bloomberg.
``Flows are just really strong because all the fundamentals are so attractive now,'' said Mario Battistel, foreign-exchange director at Sao Paulo-based brokerage Corretora Novacao. ``The central bank intervened more strongly today to prevent the real from strengthening to a rate too close to the psychologically- important level of 1.80.''
Brazil's central bank bought dollars for 1.8726 reais apiece at an auction in the morning session today and again for 1.8660 in the afternoon. The bank has purchased dollars every day for the past year.
The yield on Brazil's benchmark zero-coupon bonds due January 2008 was little changed at 11.08 percent, according to Banco UBS Pactual SA.
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