Brazil's Real Closes Slightly Stronger As Risk Aversion Eases

SAO PAULO --The Brazilian real closed slightly stronger against the dollar Friday as investors overcame early risk aversion

The real ended at BRL1.929 to the dollar compared with Thursday close of BRL1.930.

The two bombings at hotels in Jakarta put investors on the defensive in the morning, but positive second-quarter earnings from IBM and Citigroup improved the international mood.

Trading levels were low on Friday.

In credit markets, interest rates were mostly lower Friday after the latest inflation data confirmed a benign scenario.

The most actively traded contract of the BM&FBovespa exchange, that of January 2010, closed at 8.63%, down from 8.68% Thursday.

Fipe, which is affiliated with the University of Sao Paulo, said its Sao Paulo consumer price index rose 0.23% in the four weeks ended July 15, compared with a rise of 0.17% in the four weeks ended July 7.

Meanwhile, the IGP-10 price index, compiled by the Getulio Vargas Foundation, registered a decline of 0.35% in July compared with a drop 0.03% in June.

The central bank is expected to cut its key interest rate again next week from the current rate of 9.25%, and then stand pat through the end of 2009.