Brazil's bank deposit incentives and interest rates have drawn hordes of investors to the country, pouring tens of millions of dollars into the economy. The resulting appreciation of the currency, however, is seen as a mixed blessing as it threatens to squeeze Brazilian exports out of the markets, officials said.

The solution lies with the United States, they said. Finance Minister Guido Mantega became the latest advocate of urgent U.S. initiatives to beef up the dollar and rescue Brazil from the unwanted attention of investors drawn to its buoyant money markets.

Mantega struck an optimistic note, however, expressing confidence the Fed will soon act to rectify the situation.

Brazil isn't alone in Latin America to complain about an undervalued dollar and appreciation of the national currency. Chile voiced similar concerns earlier over a soaring peso and potential detrimental impact on its economy as exports get priced out of world markets.

"We know this story won't last long because the second round of the so-called policy of monetary expansion, quantitative easing, ends July first and I am hopeful there won't be Quantitative Easing Three," Brazilian media reported Mantega as saying during an event in New York.

Mantega indicated financial markets are anticipating that, at the end of the second quarter on June 30, the Fed will finalize the current policy of reinvesting principal payments from its securities holdings and the purchase of $600 billion in longer-term Treasury securities, a policy described as quantitative easing, MercoPress reported.

Mantega was upbeat about the dollar-real interaction, adding the government intended to continue with measures that would prevent "excessive" appreciation of the real. He also expressed optimism the dollar would rise.

Since last year, the Central Bank has been buying dollars in different instruments, including the spot market, as part of the strategy to restrain the real.

Brazilian President Dilma Rousseff raised the subject when U.S. President Barack Obama visited Brazil in March.

Although Brazil thrived on rising commodity prices in 2010 and earlier this year, it found itself fighting inflation as domestic demand took off on the strength of a commodity price boom and the psychological impact of Brazil's emergence as a buoyant capital market.

Analysts said that Brazil faced the challenge of not having sufficient numbers of market savvy financial players and raised the specter of mistakes in major financial transactions, with dire consequences.

Inflation is estimated to be running at more than 6 percent.

Published comments from analysts and Brazilian officials showed increased gaps and conflicting interpretations of how Brazil would check the inflationary spiral.

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