Brazilian Real Rises, Stays Near 2 per Dollar

The Brazilian real rose today, but stayed near the 2 per dollar level as the impact of the European crisis on currencies of emerging markets sapped strength of the Brazilian currency.
The real is suffering from risk aversion sentiment among speculators and Brazilian policy makers are not likely to support the currency. On the contrary, the government may be glad to see a weaker currency as President Dilma Rousseff said that she considers the real “extremely overvalued”. Alfredo Barbutti, an economist at Liquidez DTVM Ltda., summarized:

Everything is favoring the depreciation of the real. The government supports it, and there’s an environment of crisis abroad.

USD/BRL fell from 2.0015 to 1.9967 as of 14:52 GMT today. The daily minimum was 1.9930 and the maximum was 2.0064.

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