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Brazil real ends 1.1 pct weaker on US rate fears

SAO PAULO: The Brazilian real closed on Friday 1.1 percent weaker against the dollar, as the market reacted to fears of a rise in US interest rates, say traders.

The real ended trading at the week's end at 1.799 per dollar, down 1.1 percent compared to Thursday's close. For the week, the Brazilian currency lost almost 1.5 percent of its value.

"It has become clear to the market that the increase in American interest rates will go beyond previous estimates," said a trader.

Initial projections favoured next week's Federal Open Market Committee upping the short-term rate 0.25 percentage points, but bets are mounting on a 0.50 point rise.

The mood on the domestic market was shaken Friday by the release of the United States gross domestic product, showing economic expansion of 5.3 percent in the fourth quarter.

According to traders, the market is concerned a significant jump in American interest rates may cut into the direct investments coming to Brazil.-Reuters