Brazil Real Gains on Wager Banks Selling Dollars Ahead of Fixing

  • Currency rises on speculation lenders pushing up Ptax rate
  • Fixing rate known as Ptax is set by the central bank daily

Brazil’s real climbed amid speculation banks are selling dollars in an attempt to control the central bank rate used in settling some financial contracts at the end of the quarter.

Some traders might have bet the real would be at a stronger level this month and are trying to bolster the local currency, according to Jefferson Rugik, a trader at Correparti Corretora de Cambio. The central bank currency rate, known as Ptax, is calculated every business day based on data collected from banks, but the last day of the quarter becomes a reference for the settlement of many derivative contracts in the local market.

"There is a big fight among large players to try and control the Ptax rate and the ones who shorted dollars are winning for now," Rugik said.

The real rose 0.4 percent to 3.2461 per dollar at 2:45 p.m. in Sao Paulo. It is down 0.6 percent this month and 1 percent this quarter.

Even will the losses of the past three months, the real is still the world’s best performing currency this year on speculation that the country’s new president will be able to push through legislation aimed at bolstering the economy and shrinking a budget deficit. A change in a proposed bill that limits government spending could allow for higher outlays next year, according to Folha de S. Paulo. With the change, government expenses would be adjusted for inflation accumulated in the 12 months until June of the previous year, not the CPI expected for year-end, which was the government’s proposal.

Brazil’s unemployment rate rose more than estimated by economists in the three months through August as Latin America’s largest economy continued to lose jobs amid its deepest recession in decades. The jobless rate increased to 11.8 percent in the period, up from from 11.6 percent in the three months ending in July. That compares to a median estimate of 11.7 percent from 31 economists surveyed by Bloomberg.

Swap rates on the contract maturing in January 2018, a gauge of expectations for interest-rate moves, fell 0.01 percentage point to 12.19 percent.

    Before it's here, it's on the Bloomberg Terminal.