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Currency trading involves risk of loss.
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The Brazilian currency has weakened last Friday, adjusting in sell-off of the treasury bonds of US on Thursday.
It closed to BRL1.960 to U.S. dollar in a spot trading with the Brazilian Mercantile and Futures Exchange, closing in Wednesday with 1.952 real.
Thursday had been a holiday for the Brazilian markets in honor of the Corpus Christi, the treasury prices in US had been seen with the sharpest loss for about 3 years. Even with the fall in the hopes with the interest rate cuts investors slashed exposure to the government bonds of US.
With the increasing rates in the U.S. treasury’s investors would loss appetite for assets in a rising markets like Brazil.
Last Friday the Treasury and U.S. stocks recoup this caused the Brazilian currency to disregard the loss in the morning.
Taking hold on one of the dollar-purchased auctions on a daily basis, by the central bank, purchased last Friday in the late session’s auction, the real is already 1.962 to the dollar.
This purchasing of the dollar will curb the real to its positive territory at the closing rate.
The Brazilian exports continued to make up any weakening of the Brazilian currency. At the start of the month is the traditional bringing in of money from the exporters. Last June 1-3 the Brazilian government posted a trade surplus amounting to $323 million
The Brazilian Central Bank lowered the Selic interest rates by 0.5% points to 12% late last Wednesday, as expected by the investors who digest the news fully.
The local market rates, this rates was the most active traded future contract, on January 2008, fall down to 11.22% which is from 11.42% last ending on Wednesday. The Interbank of Brazil overnight fell to 11.84 which is from 12.39.
14:58
Posted on Jun-11-2007
