FX : Brazil's Real Opens Weaker As Dollar Gains Vs Euro
Brazil's Real Opens Weaker As Dollar Gains Vs Euro
SAO PAULO (Dow Jones)--The Brazilian real opened slightly weaker against the U.S. dollar on Wednesday as the U.S. currency gained ground against the euro.
The real opened at BRL1.870 to the dollar, weaker against the Tuesday close of BRL1.854.
However, traders noted that global currency trading Wednesday was cautious, with the U.S. dollar gaining against some currencies but retreating against others.
U.S. government data released earlier Wednesday showed signs of an economic recovery in the world's biggest economy. The U.S. Commerce Department released data showing durable goods orders up 4.9% in July. Analysts had expected a rise of only 3.0%.
For Brazil, analysts said the data was a double-edged sword. It could spell an early economic recovery for the U.S., meaning heavier demand for Brazilian exports, but it could also bring an end to U.S. monetary loosening, meaning higher U.S. interest rates down the road.
Higher U.S. interest rates typically syphon global investment money to the U.S. and away from emerging markets.
-By Tom Murphy, Dow Jones Newswires; 55-11-2847-4519; brazil@dowjones.com
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