Brazilian Real Climbs on European Confidence

The Brazilian real, the best performing currency among the emergent markets, rose today after the German and French positive PMI reports, which brought investors back to riskier assets relying on speculations that the economic recovery has already started.
The Brazilian currency had a weak of losses as several news mainly in China and U.S. brought risk aversion among traders this week, benefiting mostly the Japanese yen, as its the safest bet in currency markets for times of uncertainty. Today, Germany and France once again surprised economists after posting an unexpected growth for the second quarter last week, this time publishing a positive performance in manufacturing and services industries, mainly Germany, that showed a result much beyond specialists forecasts, creating a bullish pattern in stock exchanges around the world, which provided support for the real and other emergent market currencies like the South African rand to grow towards the end of this week’s session.
The so much waited world economic recovery, if confirmed, is likely to push the real even higher as national exports, mainly agriculture and metallic commodities experience a rise in their demand as the economy revives, at the same time as investors purchase real-price assets to achieve higher profits, favoring the real’s outlook.
USD/BRL traded at 1.8304 as of 13:55 GMT from an opening price today of 1.8415.

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