Brazil currency surges against US dollar

Brazil currency surges against US dollar

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Brazil’s currency has surged to a 39-month high against the US dollar on news of a poll that shows the approval rate of President Luiz Inacio Lula da Silva rising despite the current political scandal.

The Brazilian real, which has gained 13.4 percent against the dollar this year, was up 0.21 percent to R2.336 in relation to the dollar after hitting a high of R2.331 earlier in the day. The poll, from the National Transport Confederation showed that Mr. Lula’s popularity was at 40.3 percent in July, up from 39.8 percent in May.

While the poll has a 3 percentage point margin of error, it’s results indicate that resurging economic growth has offset the effect of the money-for-votes scandal that resulted in the resignation of a presidential aide and the executive directors of the ruling Workers Party. The scandal first made news on June 6, and since then stocks have dropped over 5 percent as of the close of trade on Monday.

Analysts were surprised by the outcome of the poll, but believe that it will be good for the stock market. The Bovespa index in Sao Paulo was up 1.2 percent in early afternoon trade on Tuesday to 29,316 on news of the poll.