Brazil’s ‘Real’ rises with other market currencies

Bloomberg

The real gained along with emerging-market currencies worldwide as commodities advanced, offsetting concern that Brazil’s economy continues to worsen while an ever growing corruption scandal gets closer to former President Luiz Inacio Lula da Silva.
The real rose 2.1 percent to 3.9341 per dollar in Sao Paulo. A Bloomberg gauge of 20 developing-nation currencies gained for a second day as raw materials from crude to iron ore advanced. Commodities account for about half of Brazil’s exports.
The real climbed after investors globally responded favorably to stimulus in China, Brazil’s top trading partner.
The Mexican peso and the Brazilian real led an advance among major currencies, and the yuan strengthened for the first time in eight days after the People’s Bank of China cut lenders’ reserve requirements, freeing up funds to help spur lending.
“Markets are relatively constructive and commodities are moving higher,” said Georgette Boele, a strategist at ABN Amro Bank NV in Amsterdam. “Expectations of more easing in China and globally help sentiment.”
The outlook for Brazil’s economy worsened as analysts in a central bank survey published said the nation is headed for a deeper recession. Economists in the survey expect gross domestic product to shrink 3.45 percent in 2016 and inflation to end the year at 7.57 percent.
Meanwhile, a federal official said in a letter to the Supreme Court that the task force in charge of the corruption investigation known as Carwash has been investigating Lula, President Dilma Rousseff’s mentor and predecessor, since last year.
The group is focusing on Lula’s involvement with construction companies accused of paying bribes. Lula hasn’t been charged with any crime and has repeatedly said the probes are part of an effort to discredit him.