The Brazilian currency rebounded its previous week losses posting two days of significant gains versus main currencies before a massive IPO in the nations stock exchange, which is likely to attract a great influx of foreign capital to the countrys financial system.
The real had a poor performance in the beginning in the week as world equities markets slid due to a sudden rise in risk aversion after a World Bank report indicating that the global slump may be deeper than previously expected, but as stocks succeeded to rebound, the Brazilian currency returned to rally. VisaNET, which is the Brazilian subsidiary of Visa Inc., will start its operations in the Brazilian Stock Market this week, and its IPO is likely to raise $5 billion from investors which will tend to be, in their majority, of foreign origin, creating confidence in Brazilian markets and providing support to the national currency to raise sharply, to the point the national central bank purchased dollars in order to stop Brazils real daily gains yesterday.
The situation is rather confusing for the Brazilian real at the moment, as analysts affirm that massive IPOs like these of VisaNET are very favorable for the national currency, but being the real a
USD/BRL traded at 1.9683 as of 9:54 GMT from a previous price of 1.9830.
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