Brazilian currency weakened slightly on Friday as the central bank purchased dollars. The local currency, the real, weakened 0.15 percent to 2.703 per US dollar. The central bank bought dollars yet again under a plan announced in December to rebuild scant foreign reserves. The real was also pressured a bit by domestic inflation.
The higher-than-expected result caused interest rate futures to rise, suggesting the market is betting on a rate hike to 18.25 percent from 17.75 percent at the central bank's monthly meeting on rates that concludes on Wednesday.
Still, external factors should continue to drive the real's direction next week. "The relation between the euro and the dollar is forming the price here much more than internal flows," Jorge Knauer, head of currencies and Banco Prosper, said.