Brazil’s Real Rises to Three-Month High on Stocks, Commodities

By Renato Andrade

April 9 (Bloomberg) -- Brazil’s real rose to the highest in more than three months as gains in commodity prices and global stocks boosted demand for emerging-market assets.

The real strengthened 1 percent to 2.1810 per U.S. dollar at 10:08 a.m. New York time, from 2.2032 yesterday. It touched 2.1761, the strongest since Jan. 7. The currency is poised for a second consecutive weekly gain, increasing 1.3 percent since April 3. Brazilian markets will be closed for the Good Friday holiday tomorrow.

“The real is in tandem with commodity and stock prices, that’s the reason behind the currency’s gain today,” said Tony Volpon, chief strategist at CM Capital Markets in Sao Paulo.

The UBS Bloomberg Constant Maturity Commodity Index rose 2 percent, while stocks rallied as investors speculated government measures globally to revive economic growth are working.

“It seems the worst of the crisis is over, what we expect from now on is some improvements,” said Paulo Nepomuceno, a strategist at brokerage Coinvalores, in an interview with Bloomberg Television in Sao Paulo.

The optimism halted the trend of falling yields on the overnight futures market in Sao Paulo, where the contract for January 2010, the most-traded on the BM&F commodity and futures exchange, rose one basis point, or 0.01 percentage point, to 9.74 percent.

“If things start to change for the better, the central bank will not need to be so aggressive, and the overnight market will halt the trend of reducing yields,” said Volpon.

The yield on the nation’s zero-coupon bonds due January 2010 was unchanged at 9.82 percent, according to Banco Votorantim.

To contact the reporter on this story: Renato Andrade in Sao Paulo at randrade11@bloomberg.net