Itau Unibanco (ITUB) Stock Up as Real Gains
NEW YORK (TheStreet) -- Shares of Itau Unibanco (ITUB) - Get Report are higher by 1.9% to $8.58 on Wednesday morning, as a slight pop in the real outweighs the company's decline in earnings for the first quarter.
Several Brazil-based U.S. traded stocks are getting a boost thanks to the rise in the real.
The South American country's currency is up by 0.4% to 3.5541 per dollar in Sao Paulo this morning, reversing yesterday's steep decline.
The real gained after Brazil's central bank paused its intervention to weaken the currency following its strong start to the year, Bloomberg reports. The real's rise extended to 12% so far this year.
The central bank halted weakening the currency as the Brazilian Supreme Court has been asked by a top prosecutor to authorize an investigation into President Dilma Rousseff and her predecessor.
The real has gained during periods of heightened speculation that President Rousseff will be ousted. A move many believe is an import step on the path to getting Brazil out of its current economic crisis.
"With all the optimism on the political front, there is a tendency for the real to gain in the short term," said Camila Abdelmalack, the chief economist of brokerage CM Capital Markets in Sao Paulo. "Since the central bank did not announce new auctions, we should continue to see the currency strengthening."
Additionally, Itau Unibanco, a Sao Paulo-based financial products and services company, reported weak earnings for the first quarter.
The company reported first quarter recurring earnings of R$5.24 billion, or $1.34 billion, a 10.3% decline when compared to the same period last year. Operating revenues grew by 4% year over year to R$25.9 billion or $6.6 billion.
