Brazil’s real leads gains as Embraer wins $2.6 billion in orders

Paula Sambo – Bloomberg, 6/15/2015

Brazil’s real climbed the most among major currencies as Embraer SA won jet orders worth $2.6 billion, adding to speculation that the South American country’s inflows will increase.
Executives of the company announced Monday at the Paris Air Show deals with United Continental Holdings Inc. and other foreign buyers, cementing its standing as the biggest maker of regional jets. The planemaker reached an agreement with a Chinese airline and expects growing demand in the Asia-Pacific region over the next two decades.
“Big deal announcements mean long-term, stable capital inflows and positively impact the current account and the currency,” Ipek Ozkardeskaya, an analyst at London Capital Group, said by e-mail.

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Brazil Real closes stronger

Jeff Fick – The Wall Street Journal, 02/27/2013

Brazil’s real closed stronger against the U.S. dollar Wednesday as concerns about local inflation and Italy’s political uncertainties faded.

The real exited active trading Friday at BRL1.9722 to the U.S. dollar, stronger than Tuesday’s closing price fixed at BRL1.9829, according to Tullett Prebon via FactSet.

Brazil’s currency tracked gains by the euro, seen as a key barometer for the real, as global markets rebounded from this week’s selloff on inconclusive results from the Italian elections. Investor appetite for riskier assets such as emerging-market currencies recovered after Italy successfully sold about $8.5 billion of bonds, although at the highest yields since October 2012.

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Cross-border financial regulation is justified now more than ever

Guardian, 04/19/2012

In Brazil, the prices of stock, bond and real-estate markets have increased dramatically due to speculative investors targeting the country. Photograph: Mauricio Lima/AFP/Getty Images

Brazilian president Dilma Rousseff has been travelling the world in recent weeks to tell industrialised nations to stop the “tsunami” of speculative capital flowing into her country. Low interest rates and slow growth in the global north, when coupled with relatively high interest rates and fast growth in the global south, creates the environment for investors to pull money from rich countries and to speculate on the south.

This has caused the value of developing-country currencies to appreciate – making it harder for companies and farmers to export, and thus causing job losses and a general lack of competitiveness. Speculative capital flows are also raising the price of stock, bond and real-estate markets – threatening to create bubbles such as the one experienced in the US in 2008.

Rouseff’s government has started regulating cross-border finance, and so should industrialised nations.

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