Brazilian Real Hits Six-Month High as Commodity Prices Rise

The Brazilian currency has been rallying against the dollar since risk appetite has increased last week on global markets, a rise in commodity prices and the domestic stock market helped the currency to strengthen.
Brazil’s real and the South African rand are the two best performing currencies since the optimism has returned to global financial markets, which made traders leave refuge currencies such as the yen, to put money in higher-yielding assets like the previously mentioned currencies. The Brazilian stock exchange has risen 6 percent this Monday, and investors are seeing their first days of gains since its valued dropped by half last year, in the worst moment of the global slump. Metallic commodities and the oil have surged with the mass optimism in global markets, which also contributed to spur demand for the Brazilian currency.
Opinions in Brazil are indirectly favorable for the national currency, as economists focus in the stock market recovery, they affirm that a natural consequence for the improvement in stock prices will bring more foreign investments to the country, pushing the real up. Against the dollar, Brazil’s real hit a 6-month high, but considering its pre-crisis price, it still has space for continuing this uptrend.
USD/BRL traded at 2.1146 from a previous price of 2.1818. EUR/BRL closed at 2.8304 from 2.8904 in the intraday.

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