India, Brazil, China currencies seen strengthening - POLL

But a stronger real could act as a drag on how easily Brazil can sell goods and raw materials to the rest of the world. "We're going to have trouble with exports," said Joao Medeiros, director of currency trading at Pioneer Corretora de Cambio.

RUPEE RISING

The partially convertible rupee has strengthened to its highest level in more than a year, recovering 13 percent from a record low of 52.2 per dollar touched in early March. It has risen more than 5 percent so far in 2009.

Foreign portfolio inflows have been the key driver of the rupee's rise this year, but analysts say expectations of a rate increase by the Reserve Bank of India (RBI) could drive up inflows into higher-yielding local assets.

"Fund managers want to shore up their returns, and they are likely to chase high-yielding assets. That includes emerging market equities and Indian equities," said Abheek Barua, chief economist at HDFC Bank in New Delhi.

"The pipeline for external commercial borrowings and trade credit seems to have revived, and that is putting appreciation pressure on the rupee as well," he added.

India's benchmark share index has risen more than 70 percent this year, boosted by foreign portfolio inflows of $12.7 billion, nearly reversing net outflows of more than $13 billion in 2008.

The BSE stock index is likely to rise even further by the end of 2009, taking its gains to over 80 percent for the year, on increasing signs of a global economic revival, a Reuters poll showed last month.

Rupa Rege Nitsure, chief economist at Bank of Baroda in Mumbai, said rupee strength "will be recovery driven, but a disproportionate response of global liquidity to recovery. The pace at which we are attracting inflows, certainly it is not justified by fundamentals," she said.

"Because in other parts of the world there are not many opportunities, India will keep attracting more and more inflows."

ROUBLE, YUAN

Russia's rouble has been strengthening rapidly in recent weeks, both against the dollar and the euro-dollar basket that the central bank uses to guide its foreign exchange policy.