Jeff Fick – Dow Jones Newswires/The Wall Street Journal, 05/14/2012
Brazil’s currency traded sharply weaker Monday amid renewed concerns about a possible Greek exit from the euro zone and the effect Europe’s ongoing crisis is having on the global economy.
Brazil’s real tracked declines in the euro, a key benchmark for the local currency, as Greek politicians failed to form a coalition government over the weekend. Greek political leaders will meet again Monday, but the euro fell below the psychologically significant $1.29 mark on investor concern, dragging emerging-market currencies such as the Brazilian real along with it. The real opened at BRL1.9751 to the U.S. dollar, according to Tullett Prebon via FactSet. That was weaker from Friday’s close at BRL1.9518.
“The foreign-exchange rate has settled at the BRL1.95-to-the-dollar level, but is dependent on the environment abroad,” said Miriam Tavares, foreign-exchange director at Sao Paulo’s AGK Corretora, in a morning note to clients. “There is the impression that between BRL1.90 and BRL2, there will not be any interventions by the central bank.”