Futures Market News
Real gains against greenback as Brazil eyes intervention
Mar 23, 2012 01:51 PM
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 restrain the strength of the real, Dow Jones Newswires reports.
"The authorities appear to have had more success in weakening the real this time around," states a client note authored by economist Neil Shearing with Capital Economics, Reuters reports. "This may be because investors perceive there is now a greater political will to prevent excessive appreciation."
Thus far this year, the real has advanced about 2.5 percent against the U.S. dollar. Strategies that Brazil has used during the recent months to temper the rapid appreciation of the real include applying a tax to some inflowing investments and purchasing U.S. dollars.
Both the Brazilian and Mexican economies are considered the region's most quickly developing. Mexico's trails that of Brazil as far as size is concerned while the Mexican peso is considered Latin America's most traded currency.
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