After 19 months in deficit, the Brazilian current account, which is the broadest measure of a country’s trading activity, had a surplus of $146 million, pushed mainly by a recovery in commodity prices together with a decrease in multinational companies profit remittances. The Brazilian real suffered drastically when the global slump hit Latin American in the second semester of the last year, losing ground against virtually all main currencies, but since economic conditions improved in the past months, mainly in Asia, the demand for commodities increased, causing the Brazilian stock market to rally and spurring demand for the national currency.
Brazil is a main exporter of grains and several metallic commodities, and the rising demand improved confidence in Brazilian markets, according to experts. Being the real a high-yielding currency, it has been favored by a new wave of risk appetite on world markets, which has also favored several Asian currencies and the euro. The recovery in the Brazilian equities market is also attracting foreign investors back to this Latin American nation, adding attractiveness to the country’s currency profile.
USD/BRL traded at 2.0054 from 2.0185. Brazil’s real also posted gains against European currencies being the EUR/BRL traded at 2.8020 from 2.8231 and the GBP/BRL at 3.2086 from 3.2147.
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