Brazil Real Heads to First Weekly Loss in Six on Greece Talks

Brazil’s real headed for its first weekly decline in six after European finance ministers withheld a Greek rescue package, reigniting speculation a default would derail the global economic recovery.

The real weakened 0.4 percent to 1.7240 per U.S. dollar at 9:57 a.m. in Sao Paulo, from 1.7169 yesterday. It is down 0.3 percent this week.

The Brazilian real dropped with most other major and emerging-market currencies after German officials said Greece is missing its debt-cutting targets, prompting European finance ministers to withhold aid.

“The problems in Greece still aren’t over,” Hideaki Iha, a currency trader at Fair Corretora de Cambio e Valores, said by phone from Sao Paulo. “The dollar is accompanying the external market. The euro was gaining but now it’s giving it back.”

The yield on the Brazilian interest-rate futures contract due in January 2013 rose three basis points, or 0.03 percentage point, to 9.36 percent.

To contact the reporters on this story: Josue Leonel in Sao Paulo at jleonel@bloomberg.net; Gabrielle Coppola in Sao Paulo at gcoppola@bloomberg.net

To contact the editor responsible for this story: David Papadopoulos at papadopoulos@bloomberg.net

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