Loonie rises for second day and Real up for fourth straight day

06-26-2009 11:48

The world’s largest initial public offering (IPO) within 12 months attracted investors to the main economy of South-America, which resulted in the Brazilian Real indicating its biggest gain on a weekly basis within a month. The Canadian Dollar posted its second day of gaining on the back of rising commodities and due to China repeating its request for a new global currency.

Second-best performer

The Brazilian Reais proved its best result since week 22 and advanced 2.2% to 1.9324. So far in 2009 the Real has risen 20%, which makes it the second-best trading currency versus the US Dollar among the 16 most active-traded currencies globally after South Africa’s Rand.

Huge success

The Brazilian securities regulator announced that Companhia Brasileira de Meios de Pagamento, the Brazilian affiliate of credit card network Visa Inc. (VisaNet), is obtaining 8.4 billion Brazilian Reais (4.35 billion US Dollar) by means of a record initial public offering (IPO), at 15 Brazilian Reais per share.
Flavia Cattan-Naslausky, a currency strategist at RBS Securities Inc., commented: “The IPO turned out very successful due to the fact that 50% of the price (or even more) was raised by external parties and the price corresponded with the estimated top level. The market is currently awaiting additional initial public offering statements.”
The return on benchmark zero-coupon bonds due January 2010 decreased 0.06% this week, while they remained stable today.

Positive commodity currencies trend

“The commodity-linked currencies show a positive tendency, while commodity prices rise and as the worldwide economy becomes more stable, the Loonie is likely to profit,” according to Christian Apelt, a Frankfurt-based currency strategist at Helaba Landesbank Hessen-Thüringen.
The Australian Dollar gains diminished as a result of declining crude oil on the back of the US announcement that its saving rate went up to a 15-year record level.

Renewed call for new global currency

The central bank of the People's Republic of China reiterated its request for a super-sovereign currency and stated that the IMF should increase the control on the foreign-exchange reserves of the IMF members. The Greenback dropped versus all 16 most-traded currencies, gauged by Bloomberg.