By Renato Andrade

Brazil’s real declined from an eight- month high as stocks and commodity prices dropped, reducing inflows to Latin America’s largest economy.

The currency fell for the first time in a week, losing 1.3 percent to 1.9477 per dollar at 12:04 p.m. New York time, from 1.9231 yesterday. Today’s loss pared the real’s gain so far this week to 1.1 percent, the second-best performance among the six most-traded Latin American currencies tracked by Bloomberg behind Colombia’s peso.

“The decline on equity markets and commodity prices weighed on the real’s performance,” said Mario Paiva, a currency strategist with Liquidez Corretora in Rio de Janeiro. “The U.S. dollar’s gain against other major currencies is also a reason behind the real’s fall,” he added.

The U.S. dollar rose today against all major currencies, except the South Korean won and Japan’s yen.

Brazil’s Bovespa stock index declined for a second day, on concern a drop in commodity prices may reduce earnings from raw- material producers. The UBS Bloomberg Constant Maturity Commodity Index, made up of 26 components, dropped 2.3 percent.

The real has risen 25.7 percent since March 2, spurred by a rally in commodities, the return of foreign investors to Brazil’s local markets and a weaker dollar. Nearly two-thirds of Brazil’s exports are commodities.

In May, foreigners brought to Brazil $3.1 billion more than they sent abroad, the biggest net inflow since April 2008, when the amount totaled $6.7 billion, the central bank reported today.

Rally in May

The inflow prompted the currency’s rally in May, when it rose 11.2 percent, pushing Brazil’s central bank to start buying dollars in the currency market on May 8. The bank purchased $2.75 billion in the currency market last month, according to data released today.

“In the short term, the main deterrent to more real strength remains central bank intervention,” Flavia Cattan- Naslausky, currency strategist with RBS Securities Inc. in Greenwich, Connecticut, wrote in a note for clients.

The yield on the nation’s zero-coupon bonds due January 2010 was unchanged at 9.15 percent. Yesterday, it touched 9.08 percent, the lowest since the security started trading in October 2007.