Brazil’s real climbed the most in emerging markets, ending two days of losses as the central bank resumed auctions to extend maturities on swap contracts that support the currency.
The real rose 2 percent to 2.2358 per U.S. dollar, the best performance among 24 developing-nation currencies tracked by Bloomberg and the highest closing level since Oct. 30. The currency gained 1.1 percent since March 28 in its third straight weekly advance.
The central bank held an auction today to extend maturities of 10,000 foreign-exchange swap contracts due in May worth $493.6 million. The real extended its advance as the U.S. Labor Department said employers added fewer jobs than forecast in March, damping speculation that the Federal Reserve will raise U.S. borrowing costs anytime soon.
“The market was questioning whether” Brazil would resume rollover auctions, Juliano Ferreira, an analyst at Icap do Brasil Ctvm in Sao Paulo, said in a telephone interview. “The central bank is signaling it will keep giving support to the currency this month.”
To bolster the real and limit import-price increases, Brazil sold $198.3 million of foreign-exchange swaps today under a program announced in December. The central bank rolled over last month about $7.5 billion out of $10.6 billion of swap contracts due April 1.
Fed Chair Janet Yellen highlighted the U.S. job market in a speech this week, saying that the recovery “still feels like a recession to many Americans” and the world’s biggest economy will need monetary stimulus for “some time.”
In Brazil’s interest-rates futures market, swap rates on contracts maturing in January 2017 declined 10 basis points, or 0.10 percentage point, to 12.35 percent.