Brazil real falls on potential Temer probe

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Sao Paulo, Nov 26
Brazil’s currency fell on Friday on concerns that fiscal reforms could be derailed by a
potential investigation into whether President Michel Temer pressured an ex-minister to favor a cabinet colleague’s property investment.
The real slipped as much as 2.2 percent to 3.4679 reais, but later pared losses to close down 0.6 percent.
However, Brazil’s benchmark Bovespa stock index rose 0.27 percent, to close at 61,559 points, after falling as much as 1.3 percent earlier.
Brazil’s public prosecutor is reviewing whether to investigate Temer after a former culture minister told federal
police that Temer had urged him to favor another Cabinet member who was seeking a permit for an apartment building in a historic preservation area.
Traders fear the investigations could make it harder for Temer’s administration to gather support for tough austerity measures, including a congressional amendment curbing growth of public spending. The Brazilian stock market was helped by a jump in shares of miner Vale SA, which rose more than 4 percent as prices of China-listed iron ore futures extended their recent rally.Other Latin American markets were little changed in thin trading the day after the U.S. Thanksgiving holiday. Many global investors were away from their desks as North American markets were scheduled to close early on Friday. Emerging market assets that had suffered following Donald Trump’s unexpected presidential victory, such as the Indian rupee and the Mexican peso, rebounded on Friday.

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