| Brazil stocks gain, currency slips
SAO PAULO: Brazilian stocks eked out gains on Friday despite softer U.S. bourses, while the local currency eased back from its strongest in nine months.
The Bovespa index of the Sao Paulo Stock Exchange rose 0.41 percent to 44,997.83 points. The Brazilian real weakened 0.19 percent to 2.106 per U.S. dollar as the central bank bought greenbacks on the spot market to build foreign reserves. The currency is being supported by heavy dollar inflows from Brazilian exports and bets the U.S. Federal Reserve will hold off from raising interest rates for some time. Higher rates in the United States tend to lure cash out of emerging markets.
Traders wondered if the central bank would act more aggressively to keep the real from strengthening further, which would undercut the selling strength of exports.
Ruble Up as Central Bank Targets Prices
The Central Bank allowed the ruble to strengthen 0.5 percent Thursday in what analysts called a pre-emptive strike against inflation likely to be stoked by pre-election government spending. The ruble strengthened to 29.54 to the dual-currency basket targeted by the Central Bank, made up of 60 cents and 40 euro cents, from 29.68 on Wednesday. The ruble had held steady against the basket since last September. "The Central Bank is sending a signal to the market that the ruble's appreciation will continue," said Julia Tseplyayeva, chief economist at ING in Moscow. The Central Bank declined to comment on the ruble's up-move and on the composition of the currency basket, amid market speculation that it might adjust the composition of its dual-currency basket. The bank runs a managed float, using the currency basket as a guide for its open market operations.
Dollar falls below 26.4 rubles on MICEX
MOSCOW. Feb 8 (Interfax) - The dollar fell below 26.4 rubles at the start of trading on the Moscow Interbank Currency Exchange on Thursday, due to the fact that the Central Bank strengthened the ruble by 10 kopecks against the currency basket. Until today the currency basket (consisting of 0.4 euros and 0.6 dollars) amounted to 29.66 rubles, but on Thursday morning the Central Bank lowered it to 29.56 rubles. As a result, the Central Bank's dollar purchase quotes fell to 26.39 rubles, with a current euro price on the Forex of about $1.284. The market price for today dollar deals on the MICEX by 10:40 Moscow time on Thursday amounted to 26.392 rubles/$1, and for tomorrow deals - 26.39 rubles/$1 (down by 11 kopecks from the previous day). The cost of the euro fell to 35.21 rubles/$1, which is 10 kopecks lower than Wednesday.
FOREX: Ringgit Ends Higher Against US Dollar
KUALA LUMPUR, Feb 9 (Bernama) -- The ringgit ended higher against the US dollar Friday with continued demand for the local currency following the positive economic outlook locally, dealers said. At 5pm, the ringgit rose to 3.4925/49453 against the greenback from 3.4930/4960 at Thursday's closing. "The announcement by Prime Minister Datuk Seri Abdullah Badawi that Malaysia's total trade surpassed RM1 trillion for 2006 has somewhat prompted demand for the local currency," one of the dealers said. They said the market was, however, quiet with thin trading as many players took a "wait and see" stance amid concerns over the agenda to be discussed at the Group of Seven Finance Ministers Meeting in Essen, Germany, this weekend. Both the United States and Japan, however, have indicated that they would refrain from formally discussing the Japanese yen weakness on the agenda, but would instead focus on China's rising yuan.
|
