--Greek parliament approves austerity measures, opening door for aid package --Brazil's retreating inflation opens door for local interest rate cuts --Brazilian real opens trading at BRL1.7160, stronger from Friday's close at BRL1.7255 By Jeff Fick Of DOW JONES NEWSWIRES RIO DE JANEIRO (Dow Jones)--Brazil's currency was stronger at the open Monday after Greece approved the latest package of government austerity measures, while inflation continues to retreat in Latin America's largest economy. Brazil's real currency tracked gains in the euro as the brighter outlook for the ongoing European debt crisis lifted the single currency against the U.S. dollar. The stronger euro helped boost commodities prices, a key driver for the Brazilian currency as the country is one of the world's leading exporters of such items as iron ore, orange juice and soybeans. The real opened at BRL1.7160 to the U.S. dollar, according to Tullett Prebon via FactSet. That was stronger from Friday's close at BRL1.7255. Greece's parliament on Sunday approved the latest package of austerity measures demanded by its European Union counterparts, opening the door for the debt-saddled country to receive a EUR130 billion aid package. The vote is the latest positive step toward a resolution in the single-currency bloc's ongoing debt troubles, with many now expecting Greece will be able to move forward with an orderly restructuring of its debt burden. In Brazil, easing inflationary pressures are causing economists and market analysts to maintain their outlook for lower domestic interest rates. The Brazilian Central Bank has embarked on a rate-cutting cycle since August, bringing the benchmark Selic base interest rate to 10.5%. Softer price gains would open the door for the Brazilian Central Bank to keep lowering domestic interest rates, warding off any impact from a slowdown in Europe that would also lessen the lure of Brazil's sky-high interest for foreign investors. Heavy foreign investment inflows from investors seeking higher rates of return has been a key catalyst for the Brazilian real's strength in recent years. Economists expect the Selic to end 2012 at 9.5%, according to the central bank's latest market survey released Monday. Economists also now see the central bank's benchmark interest rate falling to 10.5% at the end of 2013, down from 10.75% previously. Survey respondents kept their inflation forecasts for this year and next year unchanged. They expect the country's inflation to average 5.29% this year and 5% next year. While inflation ended 2011 at the 6.5% ceiling of the government's target range, the latest data from January showed inflation falling to 6.22%. The downward trend caused Banco Santander to reduce its outlook for 2012 and 2013 inflation. "This downward revision is being driven mostly by regulated prices," Santander said, noting that Sao Paulo electricity prices are expected to decline. Santander now expects 2011 year-end inflation at 5%, down from the previous outlook for 5.5%, although price pressures should pick up in 2013 and push inflation to 6%. Last week, the bank's Economic Policy Director Carlos Hamilton said Brazil's 12-month inflation rate will more likely end the year below the central bank's forecast of 4.7%, rather than above. Monday's session will also be marked by close attention to any intervention by the central bank. The bank jumped into the market last week to sop up excess dollar liquidity and limit the real's gains. There is growing sentiment that the bank is poised to act to undermine the real's strength should the currency edge closer to the BRL1.70-to-the-greenback level. -By Jeff Fick, Dow Jones Newswires; 55-21-2586-6085; Jeff.Fick@dowjones.com

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