Brazil's currency and stocks slip on oil spike
Brazil's currency and stocks slipped on Monday after oil soared to a new record high of more than $55 a barrel.
After starting 0.18 percent stronger, the real changed direction and weakened 0.04 percent to 2.858 per U.S. dollar.
Selling pressure was limited by a widening trade surplus, which the government on Monday said has already hit $1.7 billion this month.?"The market is really looking abroad right now. If oil rises a lot, the real will lose ground here," said Jorge Knauer, head of foreign exchange at Banco Prosper.
Stocks fell further
The Bovespa index of the Sao Paulo Stock Exchange was down 1.11 percent at 23,109 points on fears the central bank will hike its benchmark Selic rate by half a percentage point to 16.75 percent on Wednesday, more than the modest quarter percentage point most analysts expect.
Higher interest rates would slow the economy and hurt corporate sales.Bellwether Tele Norte Leste Participacoes was off 0.51 percent at 37.25 reais, while steel companies tumbled.
Companhia Siderurgica Nacional was off 3.1 percent at 41.70 reais, while Usiminas was down 3.26 percent at 42.47 reais.U.S. light oil prices prices set new highs above $55 a barrel early Monday led by record-breaking heating oil prices on fears of a winter supply crunch. It eased later in the day to $54.55.
(From Reuters, October 18, 2004)
____________