Brazil’s Real stronger as inflation worries ease

Luciana Magalhaes – The Wall Street Journal, 02/28/2013

Brazil’s real opened stronger against the U.S. dollar Thursday following Brazil’s government efforts to reduce inflation worries.

The real was trading at BRL1.9667 to the U.S. dollar, stronger than Wednesday’s closing price at BRL1.9722, according to Tullett Prebon via FactSet.

Brazil’s high inflation rate scared away private investors in the past, but the current macro-economic stability in the country favors an increase in private investments, President Dilma Rousseff said Wednesday.

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Brazil swap rates fall on surge in unemployment; real declines

Gabrielle Coppola & Josue Leonel – Bloomberg, 02/26/2013

Brazil’s swap rates dropped as the unemployment rate rose in January more than forecast, bolstering speculation policy makers will refrain from increasing borrowing costs amid tepid economic growth.

Finance Minister Guido Mantega said in New York that February inflation has been more “benign” and that the government has no plans to change the transactions tax known as IOF. The central bank will decide next week whether to hold the target rate at a record low 7.25 percent for a third meeting to support the economy even as inflation has exceeded the 4.5 percent midpoint of its target range for more than two years.

Swap rates on the contract due in January 2015 decreased five basis points, or 0.05 percentage point, to 8.42 percent at 1:43 p.m. in Sao Paulo. The real slid 0.4 percent to 1.9897 per U.S. dollar, paring its advance in February to 0.1 percent.

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Brazil Real stronger after Spain requests bank bailout

Jeff Fick - Wall Street Journal, 6/11/12

The Brazilian real traded stronger at the open Monday as a European Union deal to bail out Spain’s troubled banking sector boosted morale, although gains may be short-lived ahead of next weekend’s elections in debt-saddled Greece.

Brazil’s real joined other global currencies, especially the euro, in gaining ground against the U.S. dollar as the deal with Spain boosted investor sentiment. The Brazilian real opened at BRL2.0197 to the dollar, according to Tullett Prebon via FactSet. That was stronger from Friday’s close at BRL2.0248.

Global markets cheered the weekend deal to recapitalize Spain’s banking sector, which has been weighed down by bad loans doled out during the country’s real-estate boom. The European Union will loan Spain up to $125 billion, with the final tally set to be disclosed by independent auditors later this month. The deal eliminates, for the moment, a key pressure point in the ongoing European financial crisis.

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Brazil said to see real stronger than 1.80 in 2012

Carla Simoes – Businessweek, 01/09/2012

LAHT

Brazilian President Dilma Rousseff’s administration estimates the real will strengthen beyond 1.80 per U.S. dollar this year, a government official with knowledge of internal discussions on the issue said.

The government expects the euro region to start recovering from its current crisis in the second half of 2012, which will help weaken the dollar against other currencies, said the official, who asked not to be identified because the government doesn’t officially forecast currency moves.

The real weakened 15 percent in the past six months, the third-worst performer among the 16 most-traded currencies tracked by Bloomberg, as the euro debt crisis prompted investors to eschew riskier assets. The decline in the real led the central bank in September to reverse its strategy aimed at stemming gains in the real that were hurting manufacturers.

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Brazil adapts to weaker Real: cuts fuel tax to prop Petrobrás and contain inflation

Mercopress, 09/28/2011

The 16% reduction should help prices at the pump

Brazil cut a tax on fuel sold by Petrobras by 16% helping prevent surging import costs from squeezing profit margins at the state-run company and reducing the need for price increases as inflation quickens.

The so-called Cide tax, charged on gasoline sold by Petrobras to distributors at regulated prices, was reduced to 192.60 Real (106.90 dollars) per cubic meter from 230 Real, according to a presidential decree published in the official gazette today.

The Brazilian Real tumbled 12% against the dollar this month, the biggest drop among the 16 most traded currencies, increasing the cost of fuel imports. The tax break reduces pressure to raise fuel prices to ensure margins after inflation quickened to a six-year high of 7.33% in the 12 months through mid-September.

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