The Brazilian real weakened on Friday as the central bank stepped in to stem a rally in the currency, underperforming its regional peers after Mexico's central bank aggressively raised its key interest rate. Brazil's real declined 0.9 percent after posting its biggest monthly gain in 13 years in June, supported by a rebound in global investor sentiment.
Questions over new central bank chief Ilan Goldfajn's tolerance of a stronger currency grew, as optimism over economic prospects under interim President Michel Temer drove the real to its strongest levels in a year. The central bank reacted by selling $500 million in reverse currency swaps on Friday, which correspond to future dollar purchases.
Mexico's peso was nearly flat after the country's central bank raised its key interest rate more than expected on Thursday to calm concerns that currency weakness could boost inflation. The peso strengthened 1.1 percent on Thursday following the central bank's decision.
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