Reuters: US Dollar Report: EMERGING MARKETS-Brazil real hit by threat of cenbank dollar buys

Reuters: US Dollar Report Reuters.com is your source for breaking news, business, financial and investing news, including personal finance and stocks. Reuters is the leading global provider of news, financial information and technology solutions to the world's media, financial institutions, businesses and individuals. // via fulltextrssfeed.com

EMERGING MARKETS-Brazil real hit by threat of cenbank dollar buys Jul 3rd 2012, 22:11 Tweet Share this Email Print Tue Jul 3, 2012 6:11pm EDT * Brazil cenbank always considering to buy dollars-official * Mexican peso flat as investors wary of election dispute * Brazil real drops 1.58 pct, Mexican peso flat SAO PAULO/MEXICO CITY, July 3 (Reuters) - Brazil's real sank on Tuesday after a central bank official suggested policymakers could buy more dollars to weaken the currency in order to boost exports. Other Latin American markets were mixed. Aldo Mendes, the central bank's director of monetary policy, told local news agency Agencia Estado that disappointing industrial production figures in Brazil make it more likely the government will seek a weaker real to support exporters. He said policymakers are constantly considering the purchase of dollars on the spot market to mop up excess liquidity. Such moves tend to weaken the real. Last month Brazil was selling currency swaps to boost the real after it slumped to a three-year low, but Mendes' comments erased early gains in the real on the back of bets that the European Central Bank will cut interest rates on Thursday. "To say that the central bank may intervene buying dollars and not only selling (currency swaps) caused the market to immediately turn around," said Italo dos Santos from Icap brokerage. The Brazilian real lost 1.58 percent to bid at 2.0184 per dollar. The real has been pressured by slumping growth in Latin America's top economy. Industrial production in Brazil shrank in May for the third straight month, supporting the case for more interest rate cuts and highlighting a persistent challenge for policymakers as they struggle to revive a slowing economy. The Chilean and Colombian pesos led gains among Latin American currencies on hopes that the European Central Bank will cut interest rates to a record low on Thursday in a move that could drive prices higher for commodities like oil and copper. Chile's peso jumped 1.27 percent to close at its strongest level in more than a month as the price of copper , the country's main export, hit a seven-week high. Meantime, the Mexican peso was flat as investors warily eyed the potential for a dispute over Sunday's presidential election. Mexico's presidential election runner-up, leftist Andres Manuel Lopez Obrador, said on Tuesday he would ask the country's election authorities to recount the votes from Sunday's contest, saying it was riddled with fraud. "Investors aren't taking excessive positions until this is all over," said Antonio Magana, a currency trader at Interacciones brokerage in Mexico City. "There's a little bit of nervousness." President-elect Enrique Pena Nieto won a quick count of the vote by 6.5 percentage points, much less than expected, and his Institutional Revolutionary Party failed to capture a majority in Congress, undermining market bets that he could move swiftly to pass economic reforms. Latin American FX prices from Reuters at 2032 GMT Currencies daily % yearly % change change Latest Brazil real 2.0184 -1.58 -7.46 Mexico peso 13.3292 0.01 4.80 Argentina peso* 5.9400 0.34 -20.37 Chile peso 494.6000 1.27 4.99 Peru sol 2.6410 0.42 2.12 * Argentine peso's rate between brokerages Tweet this Link this Share this Digg this Email Reprints Comments (0) Be the first to comment on reuters.com. Add yours using the box above.

You are receiving this email because you subscribed to this feed at blogtrottr.com. If you no longer wish to receive these emails, you can unsubscribe from this feed, or manage all your subscriptions