Brazil's Real Weakens for Third Day

Brazil's real fell for a third day as a slump in agricultural and metals prices raised concern that inflows from exports will continue falling.

The real fell 0.4 percent to 1.6372 per U.S. dollar at 9:55 a.m. New York time, from 1.6312 yesterday. Brazil's currency has weakened 4.4 percent this month.

Brazil posted a trade deficit of $840 million in the week ended Aug. 24, compared with a surplus of $1.7 billion in the previous week, as prices of top exports such as iron ore fell.

Prices of iron ore exported to China fell about $10 per dry metric ton to $170 earlier in the month, according to Itau's Sao Paulo-based analyst Marcelo Brisac.

Basic material prices fell today as a rise in the U.S. dollar made commodities less attractive as a hedging instrument. The Bloomberg Forward Global Commodity Index is down almost 14 percent from its July 2 high. Most metals declined today and crude oil traded 20 percent below its July 11 record of $147.27 a barrel on the New York Mercantile Exchange.

Brazil, Bloomberg
8/26/2008 9:06:10 AM