The Brazilian real closed firmer on Friday, extending its winning streak to four straight days after shrugging off central bank intervention aimed at stemming a rise in the currency that could potentially hurt profits of exporters and manufacturers.
---- Central bank buys forwards first time this year
---- Mexico, Chile pesos gain amid better global views
The real closed 0.3 0 percent stronger at 1.7 166 to the dollar, marking the fifth straight week of gains. The currency briefly reversed similar gains earlier in the day after the central bank called an auction to buy US dollar forwards - its first currency intervention this year. By buying forwards, the central bank soaks up excess dollars in the currency market by capping future supply of the greenback.
However, a jump in US job creation bolstered the real. "More encouraging data out of the United States helped strengthen the real," said Jose Carlos Amado, a trader with Renascenca Corretora in Sao Paulo. "But from now on the market will likely remain very attentive of further intervention."
The bank's first attempt to arrest the real's 8.3 percent jump this year indicates worries among government policymakers over the size and impact of the rally on exports and economic growth. A stronger currency usually makes Brazilian-made goods less competitive in global markets, hampering export revenue. The last time Brazil's central bank intervened in the foreign exchange market was on December 15, when it tried to sell dollars on the spot market after the currency weakened sharply on fears the global economy was slipping back into recession.
Some of the gains in the real stem from massive capital inflows from investors seeking high-yielding, riskier assets such as Latin American stocks, bonds and currencies. A record $7.1 billion flowed into the Brazilian stock market last month, according to data by BM&FBovespa, the exchange operator.
Brazilian President Dilma Rousseff is seeking to help local carmakers by hiking taxes on some foreign-made cars last year. She also wants to rework a long-standing deal with Mexico for tariff-free bilateral trade in automobiles and parts. Other major Latin American currencies kept strengthening on Friday on positive job data in the United States added to market optimism that the global economy is improving. Chile's peso ended the day at a fresh 4-1/2 month high, boosted by rising prices for top export copper. The Mexican peso was trading 0. 84 percent firmer.