Brazilian Real Gains Amid Speculations About QE
The Brazilian real gained today against the US dollar as speculations that the US Federal Reserve would stimulate the economy bolstered riskier assets, weakening the US currency at the same time.
The Federal Reserve has started its two-day meeting today and will announce its monetary policy decision tomorrow. The recent stream of bad macroeconomical data led to speculations that the US central bank will turn to a policy known as quantitative easing. The potential QE would weaken the dollar, increasing demand for higher-yielding currencies at the same time.
News from Europe was also positive. Greece is planning to renegotiate the terms of its bailout package and European Union officials said that negotiations are possible.
USD/BRL closed at 2.0294 after opening at 2.0599 today.
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Earlier News About the Brazilian Real:
- Real Declines as Analysts Lower GDP Forecast (2012-06-18)
- Real Rises Even as Central Bank Lowers Main Interest Rate (2012-05-31)
- Brazilian Real Climbs as Central Bank Sells Swaps (2012-05-28)
- Brazilian Real Rises, Stays Near 2 per Dollar (2012-05-17)
- Brazilian Government Allows Real to Depreciate (2012-05-14)