Brazil's real advanced amid increasing speculation that animpeachment of President Dilma Rousseff is closer, offsetting anintervention by the central bank that signaled it may be seeking toput a damper on the currency's recent rally.

The real added 1 percent, to 3.5844 per dollar at 3:58 p.m. inSao Paulo, reaching the strongest in almost seven months, afterdropping as much as 0.9 percent earlier. The currency has surged 11percent this year, the most among its most-traded counterparts. Aindex of 20 emerging-market currencies rose 0.3 percent, halting atwo-day decline.

Traders pushed up the value of the Brazilian currency onspeculation that the PMDB party, which is part of thegovernment coalition but has wavered in its support over the pastyear, will cut ties March 29, as reported by Folha de S. Paulonewspaper. In the midst of rising impeachment risk, Rousseff isalready preparing to appeal to the Supreme Court to stop herouster, claiming the impeachment request has no legal basis, Folhawrote. Some investors and traders bet that a new government isBrazil's best hope for emerging from its recession and shoring upits fiscal accounts.