Brazil’s real plunged once again after an opinion poll showed that President Dilma Rousseff maintained her frontrunner position again.
The real fell 0.1 percent to trade at 2.23 per dollar in Sao Paulo close, joining most other major currencies that declined against the dollar. Swap rates on contracts that mature in January 2021 grew 0.06 percentage point, six basis points to 11.94 percent. Brazil’s financial markets were shut down for a public holiday on Friday.
“The voting simulations probably disappointed those who were hoping for the opposition to gain more ground,” Vladimir Caramaschi, a Sao Paulo-based chief strategist at Credit Agricole told Bloomberg. “It’s felt more in the stock market, but it could impact the currency a bit.”
The Ibope opinion poll, which was released on Thursday, showed that Rousseff’s approval ratings ahead of the October 5 elections stood at 39 percent from the previous figure of 38 percent.
The real has been the second-biggest gainer among major currencies so far this year since polls began indicating that Rousseff was becoming less likely to win the elections. Speculation has been rife, just like in India, that a fresh government may roll out measures to spur growth in the Latin American country.
Aecio Neves, Rousseff stiffest challenger, saw his popularity decline one percentage point to 21 percent. The poll involved 2,002 respondents and was conducted between June 13 and June 15. Its margin of error was 2 percentage points.
Brazil conducted a sale of $198.6 million worth of foreign-exchange swaps on Friday and rolled over agreements worth $494.6 million in order to control imported inflation and prop up the real. To register for a free 2-week subscription to ForexMinute Premium Plan, visit www.forexminute.com/newsletter.
To contact the reporter of this story; Yashu Gola at email@example.com