Real drives toward weekly loss against greenback

Posted On: September 21, 2012
The value of the monetary unit of Latin America's largest economy was driving toward its first weekly loss thus far this month on Friday, according to Bloomberg.

Finance Minister Guido Mantega of Brazil said the government he serves is considering the possibility of imposing taxes on financial transactions as a method of minimizing speculative foreign investment. He said Brazil is considering weakening the real, which would come after the U.S. Federal Reserve last week indicated it will deploy a third round of quantitative easing.

"The market is watching the central bank because there is always the possibility of intervention," currency trader Jose Carlos Amado with Renascenca DTVM Ltda. in Sao Paulo told the news service. "If dollars start coming in, they may intervene in the spot market."

Weekly losses for the real are projected to be as high as 0.5 percent, Bloomberg reports. The finance minister did note that interest rates will remain low and rate cuts remain an option.

The Wall Street Journal reports the real kicked off the Friday trading session losing value against the U.S. dollar.

Category: Industry News

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