The Brazilian real posted sharp gains today after several negative sessions on speculations that the country’s economic strength will induce central bankers to raise interest rates in the country, attracting more foreign investors.

The real lost significantly this week after the Brazilian government approved a new law taxing foreign investment on stocks, as an attempt to shun international investors that were causing the real to rally significantly, affecting Brazilian exporters. Today, the real pared much of its previous losses on optimism that the Brazilian economy will rank among the top performers among emergent markets in 2010.

USD/BRL closed this Wednesday at 1.7310 from an opening rate of 1.7535.

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