Brazil’s real rose at the fastest pace this month on speculation an opinion poll will indicate backing for President Dilma Rousseff has dropped amid difficult economic times.
The real rose 0.8 percent to trade at 2.3253 per U.S. dollar as of 2:15 p.m. Sao Paulo time, the most since August 18. The Ibovespa index of stocks gained 3.7 percent to 60,067.41, making it one of the world’s best performing stock indexes.
“The real is reflecting the Ibovespa’s good mood as rumor has it that Marina Silva is gaining ground over Rousseff,” Reginald Galhardo, a Sao Paulo-based foreign-exchange manager at Treviso Corretora de Cambio, told Bloomberg News.
The Brazil’s currency also advanced on bets the Federal Reserve will retain interest rates for a “considerable time” when it releases its policy statement on Wednesday. Most developing-market currencies also rose after Wall Street Journal said the Fed may retain its language. An Ibope poll on behalf of the O Estado de S. Paulo newspaper and Globo TV is expected to be released today.
A Vox Populi opinion poll that was released yesterday showed that Rousseff and Silva are technically tied in the election runoff on Oct. 26. Rousseff would garner 41 percent in case of a runoff, compared with 42 percent for Silva. However, the poll has a margin of error of +/- 2.2 percentage points, making it a virtual tie.
Rousseff has been widely blamed for mismanaging the economy, which slid into a recession in the first six months of this year. The annual inflation also exceeded the central bank’s target range. To register for a free 2-week subscription to ForexMinute Premium Plan, visit www.forexminute.com/newsletter.
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