Bloomberg News

Brazilian Real Strengthens for Third Day on Commodities Rally

October 25, 2011

Oct. 25 (Bloomberg) -- Brazil’s real gained for a third day as commodities rose on optimism growth in China will boost demand for raw materials and speculation European leaders will agree on a fund to contain the region’s debt crisis.

The real advanced 0.2 percent to 1.7471 per dollar at 9:53 a.m. in Sao Paulo, from 1.7506 yesterday.

Commodities rallied for a third day after a preliminary index of purchasing managers showed yesterday that manufacturing in China, Brazil’s biggest trading partner, may expand in October for the first time in four months, snapping the longest contraction since 2009. European leaders will hold a second summit in four days tomorrow, seeking to bolster the region’s rescue fund, recapitalize banks and provide debt relief to Greece.

“The real is benefiting from the rise in commodities that is still reflecting the activity data from China,” Luciano Rostagno, chief strategist at Banco West LB SA, said in a telephone interview from Sao Paulo. “The market is continuing the movement from yesterday.”

Brazil exports iron ore, sugar, soybeans, and coffee, among other commodities.

Yields on the interest-rate futures contract due in January 2013 were little changed at 10.41 percent.

-- Editors: Brendan Walsh, Richard Richtmyer

To contact the reporters on this story: {Josue Leonel} in Sao Paulo at jleonel@bloomberg.net; {Gabrielle Coppola} in Sao Paulo at gcoppola@bloomberg.net

To contact the editor responsible for this story: David Papadopoulos at papadopoulos@bloomberg.net


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