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Strategies & Market Trends : Telebras (TBH) & Brazil -- Ignore unavailable to you. Want to Upgrade?

To: Art Baeckel who wrote (21231)	8/3/2000 11:39:11 AM
From: Art Baeckel	Read Replies (1) \| Respond to of 22640

Brazil real loses ground early, seen under pressure Reuters Company News - August 03, 2000 10:29 Copyright 2000 Reuters Limited. All rights reserved. Republication or redistribution of Reuters content is expressly prohibited without the prior written consent of Reuters. Reuters shall not be liable for any errors or delays in the content, or for any actions taken in reliance thereon. Jump to first matched term SAO PAULO, Aug 3 (Reuters) - Brazil's real currency lost ground to the dollar in early trade Thursday as dealers remained apprehensive ahead of a key testimony in a public graft scandal and an auction of dollar-indexed notes, players said. By midmorning the real was trading at 1.810 to the dollar, its lowest intra-day level since July 14, compared with Wednesday's close of 1.796. "There's no shortage of reasons why the dollar should gain today," said a trader at a foreign bank in Sao Paolo. The prime concern weighing on the market was the testimony of Eduardo Jorge, a former presidential chief-of-staff who media have placed at the centre of the embezzlement of $100 million destined for a public court construction project, traders said. Players fear Jorge's testimony, due before a congressional commission at 1400 local time (1700 GMT), could draw high-ranking politicians into the scandal and dampen sentiment for Brazil's economy and the real. The Central Bank auction of dollar-indexed notes later today to roll over some debt would also serve to lift the dollar. "Normally when the central bank doesn't roll over all the debt that is expiring, the banks that are short of dollars go to the market, which ends up putting pressure on the real," said a chief trader at a local bank. The Central Bank is due to auction two lots of 1.55 billion reais ($856 million) of NBC-E dollar-indexed notes expiring on May 13 2004 and June 17 2004. It's also due to sell 4.2 billion reais in NBC-E paper on Friday. Players said the real could also suffer on market expectations that Thursday had been marked as a day for unidentified investors to make good on overseas payments. The dollar pressure comes despite a surprise announcement by Finance Minister Pedro Malan after the market close on Wednesday that Brazil was easing its primary budget surplus target under an accord with the International Monetary Fund. Brazilian data out earlier showed inflation as measured by the university of Sao Paulo Research Institute (FIPE) accelerated to 1.4 percent in July from 0.18 percent in June. ($1=1.81 reais)