Currency: Brazil's Real Rises to Seven-Year High on U.S. Profits, Inflow

Brazil's real rose to a seven-year high as confidence that U.S. corporate profits will grow reassured investors that capital flows to local markets will continue.
The real also got a boost from increased trading volume in the local stock market as Bovespa Holding SA, owner of the Sao Paulo stock exchange, debuted on the bourse today.
The real rose 1.5 percent to 1.7680 reais per dollar. New York time, reaching the strongest since trading at 1.7605 on April 19, 2000. Brazil's currency has gained 21 percent this year, the second-most among the 16 most-actively traded currencies tracked by Bloomberg after the Canadian dollar.
``The real can only gain with the heavy investment flows and the wave of IPOs we've been having here,'' said Adilson Goes, currency trading director in Sao Paulo at Levycam, a Brazilian brokerage. Encouraging earnings news in the U.S. renewed confidence that demand for local financial assets and Brazilian exports will persist, he said.
U.S. stock indexes gained after Microsoft Corp.'s sales exceeded analysts' estimates by more than $1 billion and Countrywide Financial Corp., the largest U.S. mortgage lender, forecast a profit for the fourth quarter, signaling the worst of the subprime lending losses may have passed. U.S. stock benchmarks all rose.
The yield on Brazil's benchmark zero-coupon bonds due in January 2008 was little changed at 11.16 percent, according to Banco UBS Pactual SA.
More than 80 companies have gone public in Brazil since 2005 and another 31 are awaiting approval for IPOs from securities regulator CVM, Bovespa said in its prospectus. This year, there have been 52 initial share sales, the third-biggest total in emerging markets after China and South Korea, Bloomberg data show.
The real held on to gains after the central bank bought dollars in the currency market, part of a strategy to boost international reserves and slow appreciation of the currency, which has gained 61 percent over the past four years.
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