Brazil’s Real Drops on Speculation over President Rousseff’s Re-election

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Brazil’s Real Drops on Speculation over President Rousseff’s Re-electionThe Brazilian real ended its four-day losing streak on speculation that a voter survey will indicate the popularity of President Dilma Rousseff, who is seeking re-election, has waned.

The currency rose 0.6 percent to trade at 2.2738 per dollar at midday in Sao Paulo after earlier dropping on Monday to 2.2885, the lowest level since August 7. Swap rates, which measures the expected moves in interest rates, fell 0.02 percentage point or two basis points, to 11.45 percent for the contract that matures in January 2018.

Sources privy to the issue told Bloomberg that the Datafolha survey, which was conducted on August 14-15, will show that Rousseff’s lost an advantage of between 5 percentage points to 15 percentage points against her competitor Marina Silva. Rousseff’s unpopularity has mainly been due to the fact that she has presided over the weakest economic growth in 20 years.

“Silva’s marketing people are guaranteeing a surprise, and in doubt the markets buy,” Ricardo Gomes da Silva, a Curitiba, Brazil-based currency trader at Correparti Corretora de Cambio, told Bloomberg News.

Meanwhile, the ruble plunged after Russian president Vladimir Putin met his Ukrainian counterpart amid flaring tensions. The currency fell 0.2 percent to trade at 36.1665 per dollar at 12:29 pm Moscow time, its second decline in three days.

The ruble plunged 0.2 percent to 47.7050 against the euro, ending a four-day run of gains. It declined 0.2 percent to 41.3726 against the central bank’s target basket of euros and dollars, the most in a week. The yield on the target ruble notes that mature in February 2027 plunged three basis points or 0.03 percentage point to 9.32 percent. 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 yashu@forexminute.com