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Brazilian Real Gains vs. Dollar, Unhindered by Poor Fundamentals

November 14, 2013 at 18:25 by Vladimir Vyun

20 and 50 real billsThe Brazilian real managed to gain on the US dollar today even as economic indicators in Brazil were not supportive and led to speculations that the central bank will be limited in its ability to raise interest rates.

Brazil’s economic activity contracted by 0.01 percent in September from the prior month, according to the Central Bank of Brazil. There are concerns that the nation’s budget deficit will lead to credit rating cuts. All these negative factors will likely prevent fast tightening of monetary policy.

USD/BRL fell from 2.3338 to 2.3201 as of 18:25 GMT today.

If you have any questions, comments, or opinions regarding the Brazilian Real, feel free to post them using the commentary form below.

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