Brazil’s Currency Rises From Quarterly Low as Exporters Sell Dollars

godking
02 October 2006 6:00am

Brazil’s real had its biggest weeklong gain in more than a month as exporters took advantage of a drop in the currency to sell dollars.

The currency rose as much as 1 percent, rebounding from last week’s three-month low. A 2.6 percent drop last week --the biggest since May-- allowed exporters to sell dollars at a better rate and prompted investors to snap up local assets on expectations Brazil will continue to offer attractive returns.

The yield on Brazil’s benchmark zero-coupon, local-currency bond due January 2008 fell 6 basis points, or 0.06 percentage point, to 13.77 percent, according to the Pactual Bank.

The yield on the 2015 call date on Brazil’s benchmark 11 percent dollar-denominated bond due in 2040 fell to 6.54 percent, and the yield to maturity fell to 8.363 percent from 8.377 percent last week, according to JP Morgan Chase & Co. The bond’s price, which moves inversely to the yield, rose 0.20 cent on the dollar to 129.55.

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