Brazil’s Real Rise on Commodities Rally, China’s Stimulus Plan

March 4 (Bloomberg) — Brazil’s real rose for a second day as investors bet a rally in commodities and China’s economic stimulus measures will boost demand for the South American country’s exports.

The real gained 0.7 percent to 2.4005 per U.S. dollar at 9:58 a.m. New York time, from 2.4171 yesterday. Today’s increase pares its loss in the past month to 3.9 percent.

The Brazilian currency advanced as the UBS Bloomberg index of 26 raw materials had its biggest gain in more than five weeks. Commodities including crude oil and soybeans account for nearly two-thirds of Brazil’s exports. Chinese Premier Wen Jiabao may announce new stimulus measures tomorrow, adding to a 4 trillion yuan ($585 billion) spending plan, former statistics bureau head Li Deshui told reporters in Beijing today.

“The main driver is commodities, and the Chinese plan is setting a more positive tone in emerging markets today,” said Thiago Caiuby, a trader with BES Investimento in Sao Paulo.

The yield on Brazil’s zero-coupon, local-currency bonds due in January 2010 fell three basis points, or 0.03 percentage point, to 10.76 percent, according to Banco Votorantim.

The yield on the overnight futures contract for July delivery fell five basis points to 11.18 percent.