SAO PAULO--The Brazilian real extended its early-session rally Friday in the wake of a government auction of dollar-linked swap contracts.
In late morning trading, the real was worth BRL2.016 to the dollar, up sharply from the open of BRL2.0437 and from Thursday's close of BRL2.0823.
The government sold all of the swap contracts on offer at Friday morning's auction. The contracts were worth the equivalent of nearly $3 billion. The swap contracts give investors the opportunity to exchange paper indexed to domestic interest rates for bonds linked to the U.S. dollar.
Traders said the real was also strengthening on moves by European leaders to reinforce regional banks and boost spending on infrastructure projects.
Write to Tom Murphy at tom.murphy@dowjones.com
(END) Dow Jones Newswires
June 29, 2012 10:05 ET (14:05 GMT)
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