NEW YORK (TheStreet) --Shares of Itau Unibanco (ITUB) - Get Report are higher by 2.18% to $8.92 in mid-morning trading on Wednesday, as some U.S. traded Brazil-based stocks rally along with the South American country's currency.
The real got a boost after Brazil's central bank placed only about one-sixth of the reverse swaps it offered in an auction, which indicates that traders are wary of policy makers ability to stem the real's appreciation, Bloomberg reports.
The real was up by 0.8% to 3.6139 per dollar in Sao Paulo this morning.
On Wednesday, the central bank sold 3,000 foreign exchange reverse swap contracts, which is equivalent to purchasing dollars in the futures market. The central bank did not call a swap rollover auction for the third consecutive session.
"The Brazilian central bank is testing the market and traders will test the central bank until they know what it actually intends to do," Ipek Ozkardeskaya, an analyst at London Capital Group told Bloomberg.
The real is up by 9.2% so far this year on speculation that Brazil's president Dilma Rousseff will ultimately be impeached, a move some believe will pave the way for the country to exit its current political and economic crisis.
Itau Unibanco is a Sao Paulo-based holding company that offers individual and corporate clients in Brazil a variety of financial products and services.