Brazil's currency extended recent gains to close at a three-year high on Friday. The Brazilian real erased early losses to strengthen 0.29 percent to 2.441 reais per dollar, its strongest level since May 8, 2002. Traders said dollars coming into the country from exports surged into the market in the afternoon. "Investors were on the sidelines, trading volume was very low," said Jorge Knauer, head of currencies at Prosper bank. "The market swung back and forth according to dollar flows." Next Tuesday and Friday, investors will be closely watching the release of minutes from monetary policy meetings of the US Federal Reserve and Brazilian central bank, respectively.
Investors are waiting for the Fed to signal if interest rate increases will remain moderate or take a more aggressive track. Meanwhile, investors are looking to see if the Brazilian central bank will hint if it will end its nine-month spree of monetary tightening.
Meanwhile, the real has strengthened 8.7 percent in the same period, supported by the steady dollar inflows from strong exports.
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