Brazil Real Heads for Biggest Two-Day Gain Since June on Government Signal

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  • Posted on April 8, 2011

    Brazil’s real headed for the biggest two-day gain in almost 10 months on optimism the global recovery will boost risk appetite and after the government signaled it’s more focused on fighting inflation than currency appreciation.

    The real rose 0.8 percent to 1.5734 at 9:03 a.m. in New York, from 1.5863 yesterday. The currency has strengthened 2.6 percent since April 6, the biggest two-day gain since June 10. Stocks rose and commodities climbed to a two-year high following limited damage from an earthquake yesterday in Japan.

    Finance Minister Guido Mantega yesterday doubled a tax on consumer loans as policy makers seek to curb credit growth and reduce spending to prevent inflation from breaching the 6.5 percent upper limit of their target range. Mantega said April 6 the currency’s strength was, to some extent, “inevitable” due to the economy’s growth.

    “Stocks are climbing and the market is calm,” said Felipe Brandao, emerging-markets strategist at ICAP Brasil, the third- largest currency broker on the BM&F Bovespa SA exchange. “On top of this, the market saw that the measures to contain the real were very weak.”

    Yields on the futures contract due in January, the most actively traded in Sao Paulo today, fell two basis points, or 0.02 percentage point, to 12.23 percent.

    — Editors: Richard Richtmyer, Brendan Walsh

    To contact the reporters on this story: {Josue Leonel} in Sao Paulo at; {Gabrielle Coppola} in Sao Paulo at

    To contact the editor responsible for this story: David Papadopoulos at


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