The Brazilian real dropped today as policy makers hinted that they prefer to see the currency weaker. Today’s market sentiment was positive for currencies of emerging markets and the real was rising earlier, but currently it erased its gains.
The Brazilian currency was weakening and Finance Minister Guido Mantega commented that the currency was in a ânormal trajectoryâ. President Dilma Rousseff said that the currency is overvalued. Central Bank of Brazil President Alexandre Tombini noted that the central bank is ready to intervene if additional liquidity will be necessary.
The real was weak even as traders’ mood was optimistic. Market participants hope that Greece will get its bailout eventually and such expectations bolster their confidence. Next meeting of European finance ministers is scheduled on next Monday.
USD/BRL rose from 2.0930 to 2.1046 and EUR/BRL ticked up from 2.6853 to 2.7105 as of 20:14 GMT today.
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