Brazil Real Again Weaker As Equities Slide
SAO PAULO (Dow Jones)--The Brazilian real closed a tad weaker on Tuesday, mostly due to a sell-off in equities.
The real settled at BRL1.7925 to the dollar on the Brazilian Mercantile and Futures Exchange, compared with BRL1.7910 on Monday.
The central bank of Brazil came in as a dollar buyer Tuesday, shoring up cash for its international reserves. The move didn't have any major impact on the forex rate.
Equities remained on the downside most of the afternoon, providing some of the weight against the real on Tuesday.
Royal Bank of Canada's RBC Capital Markets said in a report released Tuesday that the real is not yet overbought, and unless there is a substantial correction in commodities prices in the near future, the trend is for BRL1.65 at some point next year.
In credit markets, the January 2011 interest rate contract on the BM&F settled at 10.65%, slightly higher than Monday's close in moderate trade.
"At this point, there is no major reason for rates to make a big move in any direction," said Octavio Vaz, a fixed income manager at Global Equity, a Rio de Janeiro asset manager.
Interest rate futures are some of the most hotly traded contracts in Brazil's market and reflect investor expectation on interest rates going forward. With inflation under control, interest rates are expected to remain unchanged until early 2010.
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SAO PAULO (Dow Jones)--The Brazilian real closed a tad weaker on Tuesday, mostly due to a sell-off in equities.
The real settled at BRL1.7925 to the dollar on the Brazilian Mercantile and Futures Exchange, compared with BRL1.7910 on Monday.
The central bank of Brazil came in as a dollar buyer Tuesday, shoring up cash for its international reserves. The move didn't have any major impact on the forex rate.
Equities remained on the downside most of the afternoon, providing some of the weight against the real on Tuesday.
Royal Bank of Canada's RBC Capital Markets said in a report released Tuesday that the real is not yet overbought, and unless there is a substantial correction in commodities prices in the near future, the trend is for BRL1.65 at some point next year.
In credit markets, the January 2011 interest rate contract on the BM&F settled at 10.65%, slightly higher than Monday's close in moderate trade.
"At this point, there is no major reason for rates to make a big move in any direction," said Octavio Vaz, a fixed income manager at Global Equity, a Rio de Janeiro asset manager.
Interest rate futures are some of the most hotly traded contracts in Brazil's market and reflect investor expectation on interest rates going forward. With inflation under control, interest rates are expected to remain unchanged until early 2010.
FOR MORE CLICK HERE
