HALISTER1: BCB May Curb Volume of FX Swaps to Limit Volatility, Icap Says

BCB May Curb Volume of FX Swaps to Limit Volatility, Icap Says

(Bloomberg) -- BCB may take advantage of moments like those seen today, a strong rally, to ease its position on FX swaps, Juliano Ferreira, strategist at Icap do Brasil says in phone interview.
  • BRL pared gains today after BCB rolled over 8,000 of 9,600 swaps contracts offered in an auction; earlier, USD/BRL dropped below 3.70 on speculation corruption probes could increase the odds of a President Rousseff exit
  • BCB may keep rollovers from tomorrow to the same amount of contracts effectively sold today; BCB seeks to curb volatility, not to avoid BRL breaching any mark
  • BRL trend continues to be positive, Ferreira says; besides political scenario, mkt gains today also linked to U.S. job data that beat expectations but showed wages unexpectedly declined
Alert: HALISTER1
Source: BFW (Bloomberg First Word)

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Juliano Ferreira (ICAP PLC)

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