Brazilian real firms as Lula calms markets

By late last week, the currency had strengthened to trade above 3.30 reais per dollar for the first time since September. The currency had started the year trading at around 3.55 per dollar.

"There is a generally positive sentiment, and Lula is being given the benefit of the doubt," said Clyde Wardle, Latin America FX strategist at HSBC in New York. "Markets believe he can maintain tight fiscal discipline." But Wardle added that Lula was being given a "honeymoon period" by dealers.

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