Reuters: US Dollar Report: Brazil real trims gains on doubts about central bank swap sale

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Brazil real trims gains on doubts about central bank swap sale Oct 16th 2013, 19:20 Share this Email Print Reprints RIO DE JANEIRO | Wed Oct 16, 2013 3:20pm EDT RIO DE JANEIRO Oct 16 (Reuters) - Brazil's real erased most of its gains on Wednesday as investors wondered whether the central bank will hold on Thursday its regular sale of currency swaps, derivatives that mimic a sale of dollars in the futures market. Brazil has been auctioning as many as 10,000 currency swaps on Mondays through Thursdays as part of a $60 billion intervention program designed to provide investors with protection against a possible depreciation of the real. Doubts about the swaps offering increased, however, as the central bank has still not announced the details of the contracts that would be sold on Thursday. The bank usually issues a statement with such details around 2:30 pm local time (1730 GMT) on the day prior to the sale. Asked if the central bank was delaying the announcement of the swap sale, a spokesman said the bank was still not ready to comment. However, central bank chief Alexandre Tombini has repeatedly said that intervention program is set to last at least until the end of the year. "It's past the time for the announcement of tomorrow's (swap) auction and the central bank hasn't said anything. Folks are starting to speculate whether we'll have an auction tomorrow," said a trader with a foreign bank in Sao Paulo. The real had gained more than 1 percent earlier on Wednesday to a four-month high of 2.1551 per dollar. Many analysts believe the government is not happy with the recent strength of the currency. It last traded at 2.1745 per dollar, only 0.2 percent stronger from Tuesday's close. Link this Share this Digg this Email Reprints

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