Brazil’s swap rates fell the most in three weeks on speculation a struggling global economy will help curb inflation and allow the central bank to refrain from raising borrowing costs.
Swap rates on the contract due in January 2015 declined eight basis points, or 0.08 percentage point, to 8.45 percent at 10:23 a.m. in Sao Paulo, the biggest drop since March 14. They are down five basis points this week. The currency appreciated 0.2 percent to 2.0107 per U.S. dollar, extending its advance since March 29 to 0.6 percent.
Commodities fell today as the U.S. payrolls report showed employers hired fewer workers than forecast, fueling speculation that slowing growth in the world’s largest economy will dim prospects for Brazil. Central bank President Alexandre Tombini said in Senate testimony this week that board members will wait for March inflation figures and other data before deciding on the next policy steps.
“The drop in commodities may help reduce inflation,” Paulo Gala, a strategist at Fator Corretora in Sao Paulo, said in a telephone interview. “Tombini himself said in the Senate that the drop in wholesale prices should be passed on to consumer prices.”
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