In FX, the Brazilian Real rallied on what Bloomberg attributed to Ben Bernanke’s Jackson Hole speech in which Bernanke said “he would not rule out more stimulus”. An economic report also showed Brazil’s economy grew at the fastest pace in a year, tempering signals of slowing growth.
The currency rallied with most of its emerging-market peers as Bernanke’s comment on further stimulus boosted risk appetite and stronger growth figures fueled speculation the central bank will soon stop cutting borrowing costs, said Deives Ribeiro, the head of foreign-exchange trading at Fair Corretora de Cambio e Valores.
Brazil’s GDP expanded .4% quarter on quarter surpassing last month’s revised number of .1%.
“The second-quarter numbers show a faint recovery,” Luciano Rostagno, the chief strategist at Banco WestLB do Brazil SA, said in a phone interview from Sao Paulo. “Third-quarter numbers should be even better.”
Written by Jack S.