Brazil has a long history of ever-changing currency forms that began in the 16th century with Spanish coins first making an appearance. From then on, gold, copper and paper were also introduced. Brazil has the largest economy in South America, but in 1994, Brazil was quaking under rampant inflation. The economic solution that was subsequently developed — the Plano Real (Real Plan) — involved a monetary reform package that introduced the modern-day Brazilian Real.
|Brazilian Real Contract Specifications|
|Contract Size||100,000 Brazilian reals|
|Contract Month Listings||Consecutive contract month listings (Jan., Feb., Mar., Apr., May, etc.) for a total maturity range out 10 years|
|Daily Settlement Procedure||To reduce basis risk between the CME Brazilian real/U.S. dollar futures and the BM&FBOVESPA U.S. dollar/Brazilian real futures contract, CME Settlements Team will determine the daily settlement prices at 4:00 PM Sao Paulo time each day.|
|Final Settlement Procedure||Cash-settled|
|Position Limits||24,000 futures-equivalent contracts in a single month; 40,000 futures-equivalent contracts in all months combined**
**Position Limits: Size of position may not exceed the indicated numbers of contract, i.e., a finite limit.
|Ticker Symbol||CME Globex Electronic Markets: 6L
Open Outcry: BR
AON Code: LZ
|Minimum Price Increment||$.00005 per Brazilian real increments ($5.00/contract).|
|Trading Hours||Open Outcry (RTH): 7:20am-2:00pm CT|
|Globex (ETH): Sundays: 5:00pm – 4:00pm CT next day.
Monday – Friday: 5:00pm – 4:00pm CT the next day, except on Friday – closes at 4:00pm and reopens Sunday at 5:00pm CT.
|CME ClearPort: Sunday – Friday 5:00pm – 4:15pm CT with a 45–minute break each day beginning at 4:15pm|
|Last Trade Date||On the last business day of the month, at 9:15 a.m. CT, immediately preceding the contract month, on which the Central Bank of Brazil is scheduled to publish its final end-of-month (EOM), “Commercial exchange rate for Brazilian reals per U.S. dollar for cash delivery” (PTAX rate).|
|Block Trade Eligibility||Yes.|
|Block Minimum||50 Contracts|
|Exchange Rules||These contracts are listed with, and subject to, the rules and regulations of CME.|
Brazilian Real Facts
Brazilian Real futures allow traders to assess value against the U.S. dollar, as well as the opportunity to address risk from currency fluctuations in other foreign trade markets.
The Central Bank of Brazil is responsible for setting monetary policy as it pertains to its currency. This includes, but is not limited to the setting of interest rates. Interest rates are fundamental in determining currency values as money is pumped in or out of the marketplace, and overall can have an effect on the value of the Brazilian Real.
Source: Central Bank of Brazil
Last updated May 2013
Brazilian Real News Articles
- Real drops from 14-day peak against dollar (10/3/2013) - The Brazilian real fell from its two-week height on Thursday against the U.S. dollar after Moody's Investors Service slashed the credit rating of the South American nation, Bloomberg reports.
- Real tugged down by concerns about inflation (8/6/2013) - The Brazilian real on Tuesday dove to its four-plus-year lows against the world's reserve currency on Tuesday amid worries about surging inflation caused by losses to the currency, Bloomberg reports.
- Real loses value against U.S. dollar (6/14/2013) - The Brazilian real on Friday slipped against the world's reserve currency after the South American nation's efforts to stop capital outflows were ineffective, Bloomberg reports.
- Real climbs after Brazil cancels international investor tax (6/5/2013) - The Brazilian real edged higher in value against the U.S. dollar on Wednesday after the government of the South American nation eliminated a 6 percent tax applied to international investors' purchase of bonds, Bloomberg reports.
- Real falls to two month low against greenback (3/21/2013) - The Brazilian real on Thursday slipped against the U.S. dollar, tugged down by rough economic waters in the euro zone as investor interest deviated from the monetary unit of the largest Latin American economy, Reuters reports. Cyprus, if it does not handle circumstances regarding its troubled finances and the bailout aid made available for it last weekend by... Read More.
- Real will be cushioned against impact of QE3, finance minister says (10/10/2012) - The Brazilian real will maintain its strong presence on forex markets while the U.S. implements its third round of asset purchasing, the South American country's finance minister told Bloomberg on Wednesday. The monetary unit of Latin America's largest economy will not gain value as much as it did during the third round of quantitative easing... Read More.
- Brazilian real rises against dollar (5/25/2012) - The Brazilian real saw its recent losses to the U.S. dollar reverse slightly on Friday as the country's central bank continued to take action to support its currency, according to Bloomberg. The Brazilian central bank has auctioned off thousands of currency swaps over the past four days as the real hit its lowest point in... Read More.
- Real gains against greenback as Brazil eyes intervention (3/23/2012) - Friday saw the Brazilian real advance against the world's reserve currency, propelled by a strong January retail sales report that re-instilled confidence after dismal showings late last year, according to Reuters. But the government overseeing the monetary unit of Latin America's largest economic system is likely to move forward with additional strategies of intervening to... Read More.
- Real declines on China worries, drop in commodities (3/22/2012) - The Brazilian real dropped in value in early trading Thursday, as the U.S. dollar strengthened worldwide due to the increasing worries about economic growth in China and Europe, The Wall Street Journal reports. The real was trading at BRL1.8215 to the dollar early in the session, a change from the Wednesday close of BRL1.8184, according... Read More.
- Loonie tracks crude oil futures’ upward drive (3/20/2012) - Tuesday saw the Canadian dollar drive toward its top value since September as the loonie performed more strongly than the majority of its counterpart currencies, Bloomberg reports. But while the monetary unit of Canada gained, the U.S. dollar dropped in value against nearly all of its counterpart currencies excluding the Brazilian real. The Canadian dollar... Read More.