Brazil’s currency and stocks rose on Thursday after a congressional committee in charge of analyzing the government’s pension reform bill approved its main text. The draft bill, which analysts say is critical to improving Brazil’s fiscal health and economy, could now be put to a lower house plenary vote before recess on July 18. Brazil’s real hit a more than three-month high, while the Bovespa stock index surged 1.7% to life highs on broad-based gains. The bill, designed to overhaul the country’s bloated pension system and result in savings of around 1 trillion reais ($264 billion) over 10 years, is seen as key in getting the sluggish economy back on-track. “After approval in two voting sessions in the lower house, the pension reform would move on to the Senate, where in our view it should be approved by the end of September or beginning of October,” Credit Suisse analysts wrote in a note. “We believe that risks of additional dilution of the total fiscal savings in the Senate are very low,” they added. Brazil markets have been volatile as the bill makes its way through congress. Against a steady dollar, most other regional currencies were flat to higher. Chile’s peso, however, slipped 0.2% as prices of its main export, copper, fell. Stocks in the region, besides those in Brazil, fell between 0.04% and 0.2% after most made strong gains in last session on a Wall Street rally spurred by hopes that the Federal Reserve will cut interest rates. U.S. stock markets were closed on Thursday for the July Fourth holiday. Investors are looking out for U.S. June non-farm payrolls data for further clues on the Fed’s possible policy signal from its July meeting.

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