Brazil’s real gained for a second day on prospects the Federal Reserve will announce further stimulus when it concludes its two-day meeting today.
The real rose 0.3 percent to 2.0233 per U.S. dollar at 9:35 a.m. in Sao Paulo, trimming its decline this year to 7.7 percent. The yield on the Brazilian interest-rate futures contract due in January 2014 rose two basis points, or 0.02 percentage point, to 8.05 percent.
“The dollar fell on expectations of a Fed decision,” said Jorge Dib, portfolio manager at Grau Gestao de Ativos, in a phone interview from Sao Paulo. “The market can celebrate, but the effect will be short-term.”
A dozen of the 21 primary dealers who trade with the Fed expect some form of monetary easing to be announced today, according to a survey by Bloomberg News. The dollar fell to the weakest level in almost a month against the euro, as demand for 17-nation currency was bolstered after leaders at a Group of 20 meeting pledged to take “all necessary policy measures” to defend the currency union.
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