Brazil’s Real Increases as European Stocks, U.S. Futures Rally

By Jamie McGee

Nov. 24 (Bloomberg) -- Brazil’s real rose the most in more than a month after the U.S. government guaranteed aid for Citigroup Inc., boosting stocks in Europe and U.S. equity-index futures and signaling a growing appetite for higher-yielding assets.

The real gained 4.2 percent to 2.3630 per U.S. dollar at 8:39 a.m. New York time, from 2.4613 on Nov. 21. It gained 5.2 percent on Oct. 23. The currency has weakened 9 percent this month.

“With the bailout of Citigroup, that should bring back some risk appetite,” said Bartosz Pawlowski, an emerging-markets currency strategist in London at TD Securities Ltd. “Investors are becoming more and more convinced maybe the sell-off in Brazil has gone a bit too far.”

Futures on the Standard & Poor’s 500 Index rose 2.6 percent. The UBS Bloomberg Constant Maturity Commodity Index gained 3 percent. Nearly two-thirds of Brazil’s exports are commodities.

Citigroup, facing the threat of a breakup or sale, received $306 billion of U.S. government guarantees for troubled mortgages and toxic assets and a $20 billion cash injection from the Treasury Department.

To contact the reporter on this story: Jamie McGee in New York at jmcgee8@bloomberg.net