Brazil Real Gains After Rousseff Remarks at Impeachment Trial

  • Dilma Rousseff speaks in impeachment defense on Monday
  • Oil leads declines in commodities on Fed rate hike speculation

Brazilian Assets No More Than Fairly Priced, Says Mentel

Brazil’s real rose the most among emerging-market currencies amid investor optimism as suspended President Dilma Rousseff spoke to defend herself in the closing stages of her impeachment trial before the Senate.

The currency gained 1.1 percent to 3.2307 per dollar Monday in Sao Paulo. Rousseff is making a final appeal in her defense, saying the impeachment would amount to her death sentence and put at risk the country’s democracy. An index of 20 emerging-market currencies dropped 0.2 percent after Federal Reserve officials spurred bets on a U.S. interest-rate increase in September and commodities fell, led by oil.

Investors have piled into the real and Brazilian stocks this year on speculation that a new government would improve the country’s finances and help end the deepest recession in a century after the nation lost its investment-grade credit rating last year. The trial, on charges that Rousseff illegally financed government spending, is scheduled to finish as early as Tuesday. The Senate’s 81 members need at least 54 votes to permanently oust Rousseff and ban her from public office for eight years. Acting President Michel Temer’s allies are confident they can get 60.

"While the impeachment has been widely anticipated, it’s impact has been positive for Brazilian assets," said Georgette Boele, a strategist at ABN Amro Bank NV in Amsterdam. 

This is the first time Rousseff has addressed Brazil’s Congress directly since proceedings started in late 2015. Dozens of her closest supporters are attending the session to provide support, including her mentor, former President Luiz Inacio Lula da Silva.

Brazilian swap rates on the contract maturing in January 2018, a gauge of expectations for interest-rate moves, rose 0.02 percentage point to 12.79 percent.

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