Brazilian Currency Down 7% Over European Crisis Concern

Brazilian currency, the realThe real, Brazil’s currency, fell earlier this week over concern Europe’s debt crisis may slow the global economic recovery. The Brazilian real slid 0.9% to 1.8704 per US dollar from 1.8534 on May 21. The currency has declined 6.7% this year after rising 33% in 2009.

“We’re seeing a lot of declines on top of concerns about Greece and Europe,” said Paulo Petrassi at Leme Investimentos in Florianópolis, the capital of the southern state of Santa Catarina. “Flows will come back to Brazil when you have signs of stability out there, and it doesn’t look like that will happen in the short term.”

Brazilian currency traders are paying the highest premium in developing markets to insure against a tumble in the real after Europe’s debt crisis sparked the biggest monthly retreat since November 2008.

The so-called risk-reversal rate has more than tripled from 2.34 percentage points in February in favor of options to give investors the right to sell the real. In the overnight interest-rate futures market, the yield on contracts due in January fell one basis points, or 0.01 percentage point, to 10.92%.

Inflation in Brazil’s 12 biggest cities slowed last week, with consumer prices rising 0.47%, according to a report published Monday by the Getúlio Vargas Foundation in Rio de Janeiro.
 
Mercopress

Tags:

Ads

You May Also Like

Marina Silva Exposes Rousseff’s Vulnerabilities and Has a Real Chance to Become Brazil’s President

Brazilian environmentalist Marina Silva could unseat incumbent Dilma Rousseff in Brazil’s presidential elections in ...

Lack of Skills Makes 60% of Brazilians Unemployable

Brazil’s Ministry of Labor says that one of the country’s serious development bottlenecks is ...

Brazil’s Didn’t Act Out of Self-Interest in Hong Kong, Says Lula

Brazilian President Luiz Inácio Lula da Silva said Monday, December 19, that his country ...

Brazil Confident It Will Grow Above World Average

The Brazilian economy is in a strong position to weather the financial crisis and ...

Musings on an Interview with Sean, the American Boy Abducted to Brazil

Everyone knows that "Sean" doesn't want to leave Brazil and we also know that ...

Rousseff Says Brazil Is Just Protecting Itself While US Is Distorting World Trade

Brazilian president Dilma Rousseff, carrying on a tradition since 1947 at the United Nations ...

Despite Celebrities Participation Ice Bucket Challenge in Brazil Raises a Mere US$ 8,000

In Brazil, the ice bucket challenge, initiated in the US, has raised people’s awareness ...

Brazil One of the First to Recover from Global Crisis, Says Minister

Brazilian Finance minister, Guido Mantega. said Tuesday, July 14, that Brazil is not facing ...

Brazil Triples Alcohol Exports. Blame It on the US.

Brazil tripled its exports of alcohol in 2004, while exports of sugar grew 20%. ...

Brazil Sure Widespread Distribution of Condoms Is the Answer to AIDS

The director of the Brazilian Ministry of Health’s National Sexually Transmitted Diseases and AIDS ...