Brazil's central bank president says no country can hold dollar up
But Brazil's finance minister says they'll try anyway.
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By Arnaldo Galvao and Andre Soliani
Monday, September 20, 2010
BRASILIA -- Brazilian central bank President Henrique Meirelles said the dollar is weakening because of problems in the U.S. economy and there's very little policy makers can do about it.
"No country in the world can hold the dollar," Meirelles said today during a speech in the city of Curitiba. He said his comments weren't specifically tied to the Brazilian currency's value.
Brazil's real has gained 34 percent against the dollar since the beginning of last year, the second-best performer among the world's 16 most-traded currencies. A stronger real makes the country's exports more expensive in dollar terms, cutting into companies' profits.
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Sona Resources Expects Positive Cash Flow from Blackdome,
Plans Aggressive Exploration of Elizabeth Gold Property
On May 18, 2010, Sona Resources Corp. (TSXV: SYS, Frankfurt: QS7) announced the release of a preliminary economic assessment for gold production at its flagship Blackdome and Elizabeth properties in British Columbia.
Sona Executive Chairman Nick Ferris says: "We view this as a baseline scenario for gold production. The project is highly sensitive to the price of gold. A conservative valuation of gold at $1,093 per ounce would result in a pre-tax cash flow of $54 million. The assessment indicates that underground mining at the two sites would recover 183,600 ounces of gold and 62,500 ounces of silver. Permitting and infrastructure are already in place for processing ore at the Blackdome mill, with a 200-tonne per day throughput over an eight-year mine life. Our near-term goal is to continue aggressive exploration at Elizabeth and develop a million-plus-ounce gold resource, commencing production in 2013."
For complete information on Sona Resources Corp. please visit: www.SonaResources.com
Finance Minister Guido Mantega, speaking at an event in Rio de Janeiro last week, vowed to take measures to prevent the real from strengthening to prevent damage to exporters. He said that the Treasury had "unlimited" resources from its sovereign wealth fund to buy dollars.
The central bank purchased about $4 billion in the first four days of last week as the real jumped to its highest level since December, according to estimates by BGC Liquidez DTVM, the second-biggest currency broker on Brazil's futures exchange, and Tendencias Consultoria Integrada. The purchases would be the largest over a four-day period since October 2008, when policy makers bought a record $4.6 billion.
The real dropped 0.4 percent to 1.7283 per U.S. dollar at 3:26 p.m. New York time.
The real's price is closely tied to the currencies of other commodity-exporting countries such as Canada, New Zealand, and Australia, Meirelles said today.
Since the beginning of the month, the Australian dollar, the best performer amid the 16 most traded currencies, has jumped 6.4 percent against the dollar, while the real has gained 1.7 percent. The New Zealand and Canadian dollars are up 4.4 percent and 3.6 percent respectively.
Meirelles said the current account deficit, the broadest measure of international trade, will affect the currency's value in the long term. The gap rose to a record $43.8 billion in the 12 months through July, according to central bank figures.
Meirelles also said the central bank is committed to its inflation target and is ready to take the "necessary steps" to ensure consumer prices gains will remain in line with the 4.5 percent target in 2011.
Yields on interest rate futures contracts due in January 2012, the most traded in Sao Paulo, rose 6 basis points to 11.51 percent at 3:20 p.m. New York time.
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Prophecy to Become Coal Producer This Year
with 1.5 Billion Tonnes of Resource
Prophecy Resource Corp. (TSX.V: PCY) announced on May 11 that it has entered into a mine services agreement with Leighton Asia Ltd. to begin coal production this year. Production will begin with a 250,000-tonne starter pit as planned in August, with production advancing to 2 million tonnes per year in 2011. Prophecy is fully funded to production and its management team includes John Morganti, Arnold Armstrong, and Rob McEwen.
For Prophecy's complete press release about its production plans, please visit: