Brazil’s Real Rises on Bets Stimulus Plans Will Revive Growth

By Adriana Brasileiro
Feb. 13 (Bloomberg) -- Brazil’s real rose the most in more than two weeks as investors speculated government stimulus packages may succeed in reviving global economic growth, boosting demand for developing nations’ exports.
The real gained 2.3 percent to 2.2562 per U.S. dollar at 2:09 p.m. New York time, after most trading in Brazil had ended, from 2.3071 yesterday. The advance pares this week’s loss to 0.6 percent. The real has declined 29 percent in the past six months, the second-worst performance among the 16 most-actively traded currencies tracked by Bloomberg after the Mexican peso.
“People are starting to believe the U.S. package and other government efforts will produce the desired effect in the medium and long term,” said Adilson Goes, currency-trading director in Sao Paulo at brokerage Levycam CCV Ltda.
The U.S. House of Representatives is scheduled to vote today on a $789 billion stimulus plan that President Barack Obama has said he wants to sign by Feb. 16. The plan may jolt the U.S. economy in successive waves: relief to cash-strapped consumers, businesses and states, then a job-creating lift from spending on roads, utilities and public transit.
Australian Prime Minister Kevin Rudd won parliamentary approval for a A$42 billion ($27.7 billion) stimulus plan.
Rising prices for crude oil, a Brazilian export, also increased appetite for the real. Crude for March delivery rose 11 percent to $37.58 a barrel.
Brazil’s central bank placed 49,400 currency swaps out of 51,800 contracts offered at an auction today, providing a boost to the real. The bank said in a statement it will assess demand today for an offer of currency swaps on Feb. 16.
The yield on Brazil’s zero-coupon, local-currency bonds due in January 2010 fell 15 basis points, or 0.15 percentage point, to 11.14 percent.