Brazil Real Falls as China Factory Decline Dims Export Outlook
Brazil’s real dropped after a report showed manufacturing declined in China, the South American nation’s biggest trading partner.
The currency fell for the first time in three days, depreciating 0.8 percent to 2.2316 per dollar at 10:24 a.m. in Sao Paulo. Swap rates due in January climbed one basis point, or 0.01 percentage point, to 8.75 percent, reversing declines.
“Even though the Chinese government has showed commitment to expanding the economy, the concrete data from the country aren’t showing that it’s happening,” Reginaldo Galhardo, currency manager at Treviso Corretora de Cambio, said in a phone interview from Sao Paulo.
Brazil’s unemployment rate rose to 6 percent in June from 5.8 percent in the previous month, Brazil’s statistics agency reported today. The median forecast of 27 economists surveyed by Bloomberg was 5.8 percent.
The preliminary reading of 47.7 for China’s purchasing managers’ index released by HSBC Holdings Plc (HSBA) and Markit Economics compares with the 48.2 median forecast of economists surveyed by Bloomberg. Readings below 50 indicate a contraction of manufacturing.
Chinese Premier Li Keqiang’s efforts to rein in credit, property prices and officials’ spending risk worsening a slump even as state media say 7.5 percent growth is the lower limit for this year.
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