BRASIL: Real's Surge Fuels Speculation Of Big USD Buy.

BLOOMBERG/ Ye Xie and Andre Soliani:     "Brazil is stepping up efforts to stem a three-month currency rally as a planned $32 billion share offering by state-run Petroleo Brasileiro SA drives the real to the strongest level since December.
      Finance Minister Guido Mantega (Pictured) told investors in a Sept. 9 speech that he wouldn’t “allow” the real to keep gaining as central bank traders boosted dollar purchases in the foreign- exchange market."
     AND: “Policy makers are sending signals that they are ready to increase ammunition,” said David Beker, who heads Latin America strategy at Bank of America in New York. “There are signs that they are not happy with what’s going on.”
       The real hit a nine-month high of 1.7137 per usd today.

BRASIL: REAL Strengthens Despite Mantega's Jawboning Efforts.

BLOOMBERG / Ye Xie and Gabrielle Coppola/
   Finance Minister Guido Mantega  (pictured) has been trying to downplay the strength of the REAL, proposing that it will slump in the near future. But currency traders don't believe him. They continue bid it up. Investors feel that rising interest rates will attract foreign capital. The real’s 1.92% rise in the last three weeks is the biggest among 25 emerging-market currencies tracked by Bloomberg. After adjusting for inflation, Brasil’s benchmark rate is still the second highest among 54 countries tracked by Bloomberg and only Croatia has higher borrowing costs. But the central bank has more than doubled its dollar purchase to $18.6 billion in the foreign-exchange market this year through August from $7.3 billion in the year-earlier period to stunt the REAL's growth.

BRASIL: Real With World's Largest Currency Gain of 5.1%

BLOOMBERG/   Brasil's real rose 5.1% so far this month to $1.8038 per USD from $1.8950 on Jan. 29. That reverses much of January's 7.9% plunge. Analysts speculate that real will reach $1.72/USD by the end of 2010.

BRASIL: Real's Decline The Worst In Over A Year.

BLOOMBERG/
The real had its worst monthly decline in more than a year on a souring outlook for Chinese demand and concern about the government's problems financing its spending. The nation posted a budget deficit for a 14th straight month in December, the longest streak since 2003, on lower tax collection and higher spending.

BRASIL: Real Hits 11-Week Low On Greek Default Worries.

BLOOMBERG/
The real hit its lowest level in 11 weeks as Greece’s debt was downgraded. The real declined 1.5% to $1.7823 per USD, the weakest since Oct. 1. S&P cut Greece’s credit rating and threatened further action if the government doesn’t tackle the EU's largest deficit.

BRASIL: Real Is Still Undervalued By 7.2% Vs USD Says BofA.

BLOOMBERG/
The Bank of America says that Brasil’s real, the best-performing major currency this year, is still undervalued by 7.2% versus the dollar based on the nation’s rising exports and higher savings.
It says that emerging-market currencies are “broadly undervalued” against the dollar, with Latin America the most undervalued region in the world.

Brasil's Real Growth: "Magical Moment" Coming To An End Says Former Banker.

BLOOMBERG/
Former Brasil central banker Carlos Eduardo de Freitas believes that the real, the world's best-performing major currency this year, may rally another 6 percent against the dollar before investment begins to ebb.
“Brasil is now at a magical moment but also has weaknesses and is subject to a sudden outflow of capital,” said Freitas, who headed the central bank’s economic department from 1991 to 1993. “That is why the central bank needs to be prepared and keeps increasing international reserves. Economies do not adjust smoothly.”

Goldman Sachs: Brasil's Real "The Most Overvalued Currency "In The World.

BLOOMBERG/
The Brasil's real is among “the most overvalued currencies” in the world claims Thomas Stolper, a currency strategist at Goldman Sachs. Central bank chief Meirelles declined to comment on the currency, which touched a one-year high yesterday of 1.6978.
But Meirelles did say that emerging-market currencies that have been appreciating as economies recover from a global recession may become volatile as markets overprice assets.

Brasil's Real Has Risen 34% Vs USD.

BLOOMBERG/
Brasil’s Real has gained 32% so far this year and at its strongest level in more than a year.
Because of international market liquidity, investors are once again attracted to Brazil's comparatively high real interest rates. The benchmark Selic rate stands at 8.75% per year, although analysts expect it to rise again over the next year. The official IPCA inflation rate was 4.36% through August.

Brasil's Real Drops On China Construction Cutbacks.

BLOOMBERG.

Brasil’s real fell again because China, the country’s biggest trading partner, said it may curb overcapacity in industries including steel and cement meaning that demand for commodities From Brasil may drop.

Brasil shipped more than $10.4 billion of goods, including iron-ore and soybeans, to China in the first six months of 2009 which accounted for 15 percent of all Brasilian exports in the first half of the year.

Currency Firm Predicts Real Will Hit 11-Year High VS USD.

BLOOMBERG.

Standard Chartered Plc predicts that Brasil’s real, the best-performing currency this year, will climb 18 percent by the end of 2010 as exports to China surge to... 1.8 per USD by the end of this year.

Brasil's Real Falls On Lower China Exports And Loans.

Bloomberg.

Brasil's biggest trading partner,China, today reported a 23 percent drop in exports in July from a year earlier.