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Yields on Brazilian interest-rate futures contracts fell to a record as President Dilma Rousseff said interest rates need to be lower, fueling bets the central bank may extend the cycle of borrowing-cost cuts.
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Brazil signaled it may cut its benchmark interest rate to a record low as a still “fragile” global economy eases inflationary pressures in the world’s sixth-biggest economy.
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Yields on Brazilian interest-rate futures contracts climbed after economists increased their inflation forecasts for 2012, damping speculation the central bank may cut rates to below 9 percent this year.
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Yields on Brazilian interest-rate futures contracts fell for a third day after economists cut their inflation forecast for this year, strengthening wagers the central bank will continue to reduce borrowing costs.
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Brazilian consumer prices rose less than any analyst expected in March, pushing annual inflation to a 17-month low and raising the possibility of more government stimulus measures. Yields on interest-rate futures fell.
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Brazil’s central bank signaled it will keep cutting interest rates at the current pace after it reduced borrowing costs by a half-point for a fourth straight meeting.
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Brazilian inflation quickened more than expected through mid-September, boosting expectations that the central bank will raise interest rates in the first half of 2011. Yields rose.
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Brazil’s central bank set reserve requirements on short dollar positions held by local banks in its third attempt since October to stem a rally in the currency. The real fell for a third consecutive day.
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Brazil’s current account deficit unexpectedly widened in August as domestic demand fueled a jump in service imports and companies stepped up remittances of profits and dividends.
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Brazil’s real headed for a second weekly loss as Greece’s move to compel investors to take part in its debt swap damped demand for higher-yielding assets and as speculation mounted that the government may introduce more measures to stem the currency’s gains.