Traders Speculate that Brazilian Central Bank Won’t Support Real

The Brazilian real is volatile today as Forex traders speculated that the central bank will not be supporting the currency anymore, refraining from an intervention in the currency market, but the actions of the bank make such viewpoint questionable.
The program of foreign-exchange swaps introduced last year was supporting the real, and last month’s comments of central bank President Alexandre Tombini about reducing demand for swaps were interpreted as a signs that the central bank does not want to provide support for the currency anymore. Yet the Central Bank of Brazil offered to extend maturities on 10,000 swaps today, compared to the usual amount of 5,000 per day. The bank sends confusing signs to the market, and traders are not certain how to react, resulting in volatility for the real.
USD/BRL traded at 2.2720 as of 20:09 GMT today after opening at 2.2735. The currency rose as high as 2.2810 and fell as low as 2.2582 intraday.

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