Brazil Real Rises on Foreign Inflow Optimism; Rate Futures Jump

Brazil’s real rose for the first time this week after President Dilma Rousseff said the government is discussing a $12 billion investment with Chinese companies, boosting investor optimism that foreign inflows will continue to appreciate the currency.

The real advanced 0.9 percent to 1.5810 per dollar at 8:58 a.m. in New York, from 1.5947 yesterday.

Foxconn Technology Group, an electronic device producer, may invest $12 billion to build a factory in Brazil in five to six years, Rousseff told reporters in Beijing yesterday. The company’s executives are holding talks with the government, she said.

“It’s one more confirmation that money is going to continue to enter the country,” said Hideaki Iha, a trader at Fair Corretora de Cambio e Valores, in a telephone interview from Sao Paulo.

Yields on the interest-rate futures contract due in January, the most actively traded in Sao Paulo today, rose two basis points, or 0.02 percentage point, to 12.29 percent.