Brazil’s real rose to a seven-week high on speculation the next U.S. Federal Reserve chairman will maintain stimulus for a longer period, supporting efforts by the Latin American nation’s central bank to bolster the currency.
The real climbed 1.1 percent to 2.2543 per U.S. dollar at 9:47 a.m. in Sao Paulo, the strongest since July 25 on a closing basis. Swap rates on the contract due in January 2015 declined 10 basis points, or 0.10 percentage point, to 10.36 percent.
Brazil’s currency rallied along with most emerging-market counterparts after Lawrence Summers withdrew his candidacy as Fed chairman. Brazil’s central bank sold $497 million of foreign-exchange swaps and prepared for a rollover auction to support the currency.
“The central bank is maintaining a firm hand on the currency,” Roberto Padovani, the chief economist at Votorantim Ctvm, said by phone from Sao Paulo. “Today, the global environment is risk-on, and that favors foreign inflows coming back to emerging countries.”
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