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Has the government given-up trying to contain the real's value vs the usd?
The real just saw its biggest weekly gain since 2009...blasting thru the $1.65 level...and landing at $1.6070 per usd...a 1.5% advance.
The real has risen 3.4 percent against the U.S. dollar since 28 March, the biggest weekly jump since 17 July, 2009.
The market speculates that the government would rather slow inflation than fight against a stronger currency.
On 29 March, the c. bank said the cost is “too high” to cut inflation to its 4.5 percent goal this year from the two-year high of 6.13 percent.
“Rumors have been circulating that the government abandoned the floor of 1.65 reais, and that now the value would be 1.60 reais” said an analyst.
However, FM Guido Mantega is said to be seeking ways to lessen capital inflows from outside investors...without hurting infrastructure and industrial investments.
