Brazil Real Gains for Second Day on Outlook for U.S. Stimulus

Brazil’s real gained for a second day on prospects the Federal Reserve will announce further stimulus when it concludes its two-day meeting today.

The real rose 0.3 percent to 2.0233 per U.S. dollar at 9:35 a.m. in Sao Paulo, trimming its decline this year to 7.7 percent. The yield on the Brazilian interest-rate futures contract due in January 2014 rose two basis points, or 0.02 percentage point, to 8.05 percent.

“The dollar fell on expectations of a Fed decision,” said Jorge Dib, portfolio manager at Grau Gestao de Ativos, in a phone interview from Sao Paulo. “The market can celebrate, but the effect will be short-term.”

A dozen of the 21 primary dealers who trade with the Fed expect some form of monetary easing to be announced today, according to a survey by Bloomberg News. The dollar fell to the weakest level in almost a month against the euro, as demand for 17-nation currency was bolstered after leaders at a Group of 20 meeting pledged to take “all necessary policy measures” to defend the currency union.

To contact the reporters on this story: Blake Schmidt in Sao Paulo at bschmidt16@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