Brazil’s Real Climbs to 2-Month High as Global Stocks Increase

By Drew Benson

Jan. 6 (Bloomberg) -- Brazil’s real rose to the highest in almost two months as a rally in global stocks boosted investor appetite for the nation’s higher-yielding assets.

The currency gained for a second day as the price of soybeans, the nation’s top agricultural export, climbed to a three-month high.

The real jumped 2.2 percent to 2.1883 per dollar at 7:25 a.m. New York time, from 2.2372 yesterday. It touched 2.1591 per dollar, its strongest since Nov. 10.

“It’s attractive for people with an appetite for risk, at least a calculated risk with Brazil’s conditions right now,” said Reginaldo Galhardo, currency trading manager at Treviso Corretora de Cambio in Sao Paulo. He forecasts the real will reach 2.1 per dollar this month.

The real’s climb came as the government reported that industrial output during November plunged 6.2 percent from the same period a year ago, the most in seven years, as the global credit crunch sapped demand for products from computers to cars.

European stocks gained for a sixth day and U.S. equity-index futures advanced as speculation grew that government stimulus measures will revitalize the global economy.

Soybeans climbed on speculation higher oil prices will increase demand for grains as a source of alternative fuel and concern that warm, dry weather will damage crops in South America.

The yield on Brazil’s overnight futures contract for January 2010 declined 11 basis points, or 0.11 percentage point, to 11.95 percent.

The yield on Brazil’s zero-coupon local-currency bonds due January 2010 fell seven basis points to 12.04 percent.

To contact the reporter on this story: Drew Benson in Buenos Aires at abenson9@bloomberg.net