The real led global currency gains after Brazil’s industrial output unexpectedly increased in May while U.S. payroll data indicated stagnating wages.
“The industrial improvement was a very positive sign for the economy,” Joao Paulo de Gracia Correa, a foreign-exchange superintendent at SLW Corretora de Valores, said in a telephone interview from Sao Paulo.
The currency climbed from a one-month low as President Dilma Rousseff’s administration got some good news after its effort to cut budget deficits and preserve the nation’s credit rating suffered a setback in Congress. The real rose even as Brazil’s antitrust agency investigated allegations of currency manipulation at Citigroup Inc., Morgan Stanley, HSBC Holdings Plc and 12 other banks.
The real climbed 1.7 percent to 3.0967 per U.S. dollar at the close of trade in Sao Paulo, the best performance among 31 major tenders tracked by Bloomberg. Swap rates, a gauge of expectations for changes in Brazil’s borrowing costs, dropped 0.20 percentage point to 13.82 percent on the contract maturing in January 2017.
The antitrust agency said in an e-mailed statement that it is also looking into UBS AG’s and JPMorgan Chase Co.’s possible roles in an alleged cartel to fix prices between 2007 and 2013. Officials at the banks either declined to comment on the allegations or couldn’t immediately be reached.
Brazil’s industrial output rose 0.6 percent in May after a 1.2 percent decline in the prior month, the national statistics agency said Thursday. That was better than every estimate from 39 economists surveyed by Bloomberg, whose median forecast was for a 0.4 percent decline. Industrial output fell 8.8 percent from a year earlier.
The real also rose as the U.S. jobs report added to speculation that the Federal Reserve will raise interest rates later than expected, encouraging demand for higher-yielding assets. Average hourly earnings at private employers held at $24.95.
Brazil’s currency fell Wednesday to a one-month low after the Senate passed a bill that would boost pay for workers in the judiciary system. Finance Minister Joaquim Levy has cautioned that failure to adopt belt-tightening measures may result in a sovereign-credit downgrade.
The central bank extended the maturity on 7,100 foreign-exchange swaps contracts worth $347.2 million Thursday. It is on pace to allow 30 percent of outstanding swaps to expire July 31, the same as the end of June.