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Dollar Crosses 2.5 Reais Barrier in Brazil. Stocks Go Down

The American dollar was up in Brazil for another day, closing above 2,50 reais, this Thursday, December 4. The greenback ended up getting up 2.46% in value, being negotiated at 2.536 per dollar.

The dollar hasn't been this high since April 28, 2005. This brings the accumulated value of the US currency to 42.71% this year. This week alone the dollar gained 9.54%.

As for Brazil's stock exchange, the Bovespa, after a day in the black it ended up the Thursday session down. The Ibovespa, Bovespa's main index, lost 0.48%, ending up the day at 35,127 points.

The volume exchanged stayed below average at 2.5 billion Brazilian reais (US$ 999 million).

Among the best performing shares were Brasil Telecom and building company Gafisa, which saw advances over 8% and 6%, respectively. Blue chips oil multinational Petrobras and bank Bradesco lost over 3%.

Henrique Meirelles, the president of Brazil's Central Bank (BC), informed that the Brazilian monetary authority spent over US$ 6.7 billion from its reserves in direct sales of dollars in the market. The BC, which has more than US$ 200 billion in reserves has already spent a total of US$ 49.5 billion for interventions in the market.
 
The BC revealed on Wednesday, December 3, that due mainly to money withdrawal by foreign investors Brazil had a negative balance of US$ 7.16 billion in November. 

João Medeiros, from the Pioneer brokerage house, believes that the heavy volume of resources leaving Brazil is a reflex of the international economic crisis. Says he, "The companies are very worried. If we have a recession throughout the world we're going to get a smaller commercial surplus."

Next: Lula Ridicules Free Market and Sees Self as Don Quixote Amid Cassandras
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