Brazil Shares Jump, Real Surges Against Dollar After 1st Round of Presidential Vote

October 6, 2014

Jeffrey T. Lewis, Rogerio Jelmayer, and Luciana Magalhaes – The Wall Street Journal, 10/6/2014

Brazilian shares jumped and the real surged against the dollar after pro-business candidate Aécio Neves performed better than expected and placed second in Sunday’s presidential election.

Mr. Neves will face President Dilma Rousseff, who finished with the most votes, in a runoff on Oct. 26.

Investors have complained about Ms. Rousseff’s economic policies, which they say have hurt growth. For weeks Brazilian shares have risen and the real strengthened on any bad news for the president, and vice versa.

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Brazil’s Real Drop to Five-Year Low as Rousseff Support Climbs

October 1, 2014

Filipe Pacheco – Bloomberg, 10/1/2014

Brazil’s real fell to a five-year low on concern Latin America’s largest economy will struggle to recover as a voter poll showed President Dilma Rousseff winning her re-election bid.

The real declined 0.3 percent to 2.4549 per U.S. dollar at 10:03 a.m. in Sao Paulo, the lowest level on a closing basis since December 2008. The currency declined 9.5 percent in the third quarter, the worst performance among 24 emerging-market currencies after Russia’s ruble.

Rousseff has taken the lead and would win a second term in Brazil’s election this month against former Environment Minister Marina Silva, according to a Datafolha poll released yesterday after markets were closed. Speculation that a new government would revive economic growth and curb inflation helped push the real to a one-month high on Aug. 29.

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Brazil’s Rousseff extends lead over Silva in election poll

September 30, 2014

Anthony Boadle – Reuters, 09/29/2014

President Dilma Rousseff’s expected victory margin over closest rival Marina Silva has surged to 9 percentage points in a second-round runoff in Brazil’s presidential election, an opinion poll showed on Monday, causing stocks and the real currency to tumble.

Rousseff would win the runoff with 47.7 percent of the votes against 38.7 percent for Silva, polling firm MDA said, widening her lead from the one-point advantage she had in the previous survey by the firm last week.

Another survey released later on Monday by the Vox Populi polling firm showed Rousseff with a seven-point lead over Silva in a runoff, unchanged from a week earlier.

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Brazilian Stocks, Currency Plummet as Presidential Election Looms

September 30, 2014

Jeffrey T. Lewis and James Ramage – The Wall Street Journal, 09/29/2014

Brazil’s stock market and currency were sent reeling Monday by signs President Dilma Rousseff is pulling ahead of her main challenger in the country’s presidential election next month.

The Brazilian real weakened to its lowest level against the dollar in nearly six years Monday, declining 2.4% to 2.4777 reais, before paring losses to 2.4543 reais later in the day. The country’s benchmark Ibovespa stock index fell as much as 5% in early trading and was down 2.2% early in the afternoon.

Brazil’s losses were among the worst in a broad selloff that hit financial markets across the developing world. Developing economies have been caught up in fears the Federal Reserve is moving closer to raising interest rates, a move that would make higher-yielding currencies, such as those in emerging markets, less attractive to investors. Concerns about protests in Hong Kong have also sent investors into less-risky assets.

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Brazil’s Real Drops to Seven-Month Low as Silva’s Support Falls

September 19, 2014

Paula Sambo – Bloomberg, 9/19/2014

Brazil’s real fell to a seven-month low as a voter poll showed a drop in voter support for Marina Silva as President Dilma Rousseff defended her economic and fiscal policies before the October election.

The real dropped 0.4 percent to 2.3732 per U.S. dollar at 2:36 p.m. in Sao Paulo, extending this week’s decline to 1.5 percent, the biggest among 16 major currencies tracked by Bloomberg. Swap rates, a gauge of expectations for changes in borrowing costs, increased seven basis points, or 0.07 percentage point, to 11.70 percent on the contract due in January 2016 as a report showed inflation accelerated. They were up nine basis points since Sept. 12.

“Markets are not pleased with Rousseff gaining support,” Joao Paulo de Gracia Correa, a trader at Correparti Corretora de Cambio in Curitiba, Brazil, said in a telephone interview.

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Brazil’s Real Falls on Moody’s Outlook as Rousseff Gains Support

September 10, 2014

Paula Sambo – Bloomberg, 9/9/2014

Brazil’s real dropped with bonds as Moody’s Investors Service lowered the nation’s credit rating outlook to negative and a poll showed increased support for President Dilma Rousseff during a recession.

The currency slid 0.8 percent to 2.2847 per dollar at the close of trade in Sao Paulo, the weakest since Aug. 25. Government bonds maturing in 2025 fell 1 cent to 101.84 cents on the dollar in the biggest decrease since March.

The real pared its rally in 2014 to 3.4 percent as Moody’s said in a statement that the nation’s low economic growth probably won’t improve in the short term. The currency dropped earlier today as a CNT/MDA poll showed that Rousseff would be tied in a runoff with Marina Silva, who led previous surveys.

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Brazil’s Real Tumbles on Concern Rousseff Is Picking Up Support

September 9, 2014

Paula Sambo – Bloomberg, 09/08/2014

Brazil’s real declined the most in emerging markets on speculation voter polls will show increased support for President Dilma Rousseff as she seeks re-election amid a recession and above-target inflation

The real fell 1.1 percent to 2.2675 per U.S. dollar at the close of trade in Sao Paulo, the biggest drop among 24 developing-nation currencies tracked by Bloomberg. Swap rates increased 21 basis points, or 0.21 percentage point, to 11.23 percent on the contract due in January 2020.

The same tracking polls that correctly predicted growing support for opposition candidate Marina Silva are now showing a slight decline in her support, according to a report today by newspaper Folha de Sao Paulo. A new poll by CNT/MDA may be released tomorrow and three others could be released this week. Speculation that Rousseff will lose her bid for re-election amid a faltering economy has helped to push the real up 4.2 percent in 2014, the most inemerging markets.

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