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:

You May Also Like

Arab Bank ABC Trades Shares at Brazil’s Stock Exchange

ABC Brazil bank, the Brazilian branch of the Arab Banking Corporation (ABC), which is ...

One Million Brazilians Have Been Displaced by Dams

March 14 was International Day of Action Against Dams and for Rivers, Water and ...

From Cradle to Grave Brazilian Blacks Have it Tougher

The Brazilian Racial Atlas, launched yesterday, December 1st, demonstrates that racial inequality still exists ...

LETTERS

Samba for the next millennium won’t be restricted to the borders of Brazil. Thanks ...

Brazil Strikes Gas and Oil Once Again in Deep Sea

State-controlled oil multinational Petrobras confirmed this week the discovery of new natural gas reservoirs ...

In Brazil Lawmakers Will Make More than Their US and European Peers

Brazilian lawmakers (Lower House and Senate) thanks to a generous recent 62% increase will ...

Dollar Investment in Brazil Falls by 88%

The balance of financial and commercial transactions between Brazil and foreign countries posted a ...

Lula Soothes Brazilians, Then Asks Them to Trust Him and Go Out and Shop

Despite the international economic crisis the President of Brazil, Luiz Inácio Lula da Silva, ...

In Brazil, Political Reform Is Dead, Long Live the Pizza

Starting this week, it is enough to count up to 30. The House has ...

It’s Carnaval in Brazil. Order Is to Party Till You Pass Out or the Cops Get You

Carnaval is on. And Brazil will be Carnaval country till Wednesday noon at least. ...