Brazilian real posts biggest weekly rise in six weeks

Brazil's real rallied 1% against the dollar on Friday, in its biggest weekly rise in six weeks, as traders continued to buy the currency after it hit a record low last week.

The real's rise to around 4.14 per dollar, its strongest against the greenback in almost four weeks, brought its total gains for the week to more than 2%.

Positive news this week has prompted traders to cover short positions, after the real's drop on Nov. 26 to a record low of 4.2770 per dollar triggered dollar-selling intervention from the central bank.

Official figures showed the economy grew by 0.6% in the third quarter, faster than economists had expected, and the Economy Ministry revised up the last three months' export figures by a combined $6.5 billion.

"A tremendous rally amid a global risk-on mood," said a senior trader at bank in Sao Paulo. "Forget the noise and focus on the economic recovery. The FX market is now very long dollars."

Data from the US Commodity Futures Trading Commission on Friday showed funds and speculators on US futures markets increased their net short Brazilian real positions in the week ended Dec. 3 to 44,614 contracts, the largest net short in six weeks and one of the largest in years.

Short sellers sell an asset when they expect it to fall in value.