Brazil’s Real Rebounds After Stocks, Oil, Metals Advance

By Fabio Alves
Aug. 27 (Bloomberg) -- Brazil’s real rebounded from the lowest level this month after global stocks, oil and metals erased losses.
The Brazilian currency fell 0.3 percent to 1.8668 per U.S. dollar at 5:16 p.m. New York time, from 1.8620 yesterday. Earlier, the real retreated as much as 1.6 percent and touched 1.8887, the weakest since July 29.
The Standard & Poor’s 500 Index rose 0.3 percent, after losing as much as 1.2 percent earlier. The Dow Jones Industrial Average gained 0.4 percent, and the Nasdaq Composite Index increased 0.2. The MSCI World Index of 26 developed nations added 0.3 percent.
“EM assets had a roller-coaster Thursday, coming under heavy pressure in New York morning trading before rebounding strongly in line with a late-day positive turnaround in U.S. equities and commodity prices and flight from the dollar,” RBC Capital Markets strategists wrote in a note to clients today.
The Bloomberg Base Metals 3-Month Price Commodity Index rose for the first time in three days, adding 0.5 percent. Commodities account for two-thirds of Brazil’s exports.
Crude oil added 1.7 percent to $72.63 a barrel in New York.
The real has gained 23 percent this year, the best performance against the dollar among 26 emerging-market currencies tracked by Bloomberg.
“It seems market participants remain hesitant about whether we are going to get a continuation of the positive risk appetite mood and are taking their cues for intraday trading from U.S. equity markets,” said Alberto Boquin, a Latin American debt and currency strategist at Merrill Lynch & Co., a unit of Bank of America Corp. “Longer-term, fundamentals remain supportive of a stronger Brazilian real.”