Brazil's Real Closes Weaker
RIO DE JANEIRO--Brazil's real closed weaker against the dollar Tuesday, after a strong start to the week, as relief over China's second-quarter economic growth gave way to renewed fears about a possible withdrawal of monetary stimulus by the U.S. Federal Reserve.</br></br>The real exited active trading near its intraday lows at BRL2.2536 to the dollar, according to Tullett Prebon via FactSet, compared with BRL2.21 shortly after the open and BRL2.2263 at Monday's close.</br></br>The real's return to last week's levels contrasted with the broader trend in major currencies, which mostly gained against the greenback Tuesday. But market participants noted that the Brazilian currency had one of its best days of the year in the previous session, as investors breathed a collective sigh of relief after Chinese economic data came in line with expectations.</br></br>"Today it came back to where it had been," said Joao Medeiros, a partner at Sao Paulo's Pioneer brokerage.</br></br>Triggering the real's losses early Tuesday were slightly higher-than-expected inflation numbers out of the U.S., which economists say tilt the scales in favor an earlier end to the Fed's bond-buying program. The so-called quantitative easing policy pumps $85 billion of liquidity into bond markets every month and is widely believed to have boosted assets such as currencies and stocks in recent years.