Emerging markets: Brazil's real sinks near central bank trigger
Joao Medeiros, a currency director with Pioneer brokerage in Sao Paulo, said, "I don't see the fundamentals of this currency move, but according to what Dilma said, the government wants a weaker real."
In a note to clients, Nomura strategists said they expect the real to weaken to 2.14 per dollar in the near future.
Other analysts expressed concern that a weaker currency could further boost the price of imported grains and other commodities, boosting an inflation rate that is already running above the government target of 4.5 percent, with a tolerance band of 2 percentage points up or down.
"With economic activity gaining momentum, another round of real depreciation could have a larger effect on inflation, which is an event we do not believe the central bank is looking for," Barclays' analysts Guilherme Loureiro and Marcelo Salomon wrote in a research note.
Inflation concerns also drove Brazil's domestic yield curve higher. Interest-rate contracts maturing in January 2014 rose 1 basis point to 7.34 percent.
The Mexican peso briefly firmed past the psychologically important 13.000 per greenback level, which had not been touched since Nov. 7. before falling back to 13.0575.
Flavia Cattan-Naslausky, a strategist with RBS Securities, said the peso's fall was due to jitters ahead of the U.S.
Thanksgiving holiday on Thursday, which would thin market
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