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To: TobagoJack who wrote (55903)	11/13/2004 3:31:10 AM
From: elmatador	Respond to of 74559

Brazil's Real Rises to 9-Month High on Trade, Rates Outlook Nov. 12 (Bloomberg) -- Brazil's real rose to a nine-month high on speculation record exports will boost U.S. dollar inflows and rising domestic interest rates will attract foreign investment into South America's biggest economy. Brazil's Trade Ministry forecasts that the country will export a record $94 billion worth of goods in 2004 after six straight months of trade surpluses of $3 billion or more. The central bank may boost lending rates for a third month next week in a bid to ease concern inflation will accelerate, Helio Ozaki, currency trader at Banco Rendimento in Sao Paulo, said. ``Trade flows continue strong and another increase in interest rates this month will certainly help the real,'' said Ozaki in a telephone interview. ``The market is aware there is no reason for the dollar to strengthen against the real.'' The real gained 0.5 percent to 2.8053 per dollar at 8:10 a.m. New York time from 2.8180 late yesterday, boosting its gain against the dollar since June 30 to 9.8 percent, the third-best performance of the 16 major currencies. Earlier, it rose as much as 0.5 percent to 2.8050 per dollar, its strongest since reaching 2.8015 per dollar on Jan. 15. The central bank will boost interest rates by at least 0.25 percentage points next week to 17 percent from 16.75 percent at its monthly monetary policy meeting, Ozaki said. The bank boosted rates 0.25 percentage point in September and 0.50 percentage point in October. Exports Rising exports of commodities such as soy and iron ore coupled with an increase in exports of vehicles and auto parts have helped Brazil boost its trade surplus this year, the government said. The Trade Ministry forecasts that Brazil's trade surplus will rise 30 percent from the record $24.8 billion surplus of 2003. Trade Minister Luiz Fernando Furlan said yesterday the government will expand and modernize Brazilian ports to help the country surpass the $100 billion export mark next year. Optimism a trade agreement between Brazil and China will add to exports next year and increase investments in infra-structure is also improving perspectives for the real in coming months, Mario Battistel, director of foreign exchange at Novacao Corretora de Cambio in Sao Paulo, said. Brazilian President Luiz Inacio Lula da Silva is meeting Chinese President Hu Jintao as the two nations seeks to continue trade talks started earlier this year, when Lula visited China in May. China is Brazil's third-biggest trade partner after the U.S. and Argentina, according to the Trade Ministry. ``The Chinese have great interest in our food and they want to invest in infrastructure here to cut the cost of their imports,'' Battistel said. Trade between the two countries will soar to $35 billion, from an expected $12 billion in 2004, Li Minglin, a director at China's Ministry of Commerce, said yesterday. Brazil's benchmark bond maturing in 2040 rose 1.15 cents on the dollar to 112.90, causing the yield to maturity to drop to 9.70 percent, according to JPMorgan Chase & Co. To contact the reporter on this story: Romina Nicaretta in Sao Paulo at at Rnicaretta@bloomberg.net To contact the editor responsible for this story: Laura Zelenko in New York at lzelenko@bloomberg.net Last Updated: November 12, 2004 08:11 EST