Brazil’s real headed for the biggest rally among major currencies this week as the U.S. government shutdown added to speculation the Federal Reserve will sustain a stimulus program that has buoyed emerging-market assets.
Brazil’s real was headed for a second straight weekly gain as the central bank maintained its intervention program and concern eased that the Federal Reserve will begin winding down its stimulus program next week.
Brazil’s real climbed from a four- year low as U.S. employers added fewer jobs than forecast in July, easing concern that the Federal Reserve will curtail a stimulus program that has supported emerging-market assets.
The real advanced to the strongest in a week after the Federal Reserve cut the cost of emergency dollar funding for European banks as part of a globally coordinated response to alleviate a dollar shortage.
Yields on Brazilian interest-rate futures contracts fell for the first time in four days after inflation unexpectedly slowed to within the government’s targeted range last year, prompting bets the central bank has room to speed up interest-rate cuts.
The real headed for the biggest weekly drop since mid-December as signs of muted growth in Europe and concern about intervention on the currency market fanned speculation investment in Brazil will slump.