Brazil stocks steady, real firms awaiting Fed

SAO PAULO, June 24 (Reuters) - Brazilian stocks traded near flat on Tuesday after a fall in banking shares, but the currency strengthened amid expectations the U.S. Federal Reserve will maintain it key rate on Wednesday.

The Sao Paulo Stock Exchange's benchmark Bovespa index .BVSP edged up 0.06 percent to 64,681 points after closing practically unchanged the previous day.

The Brazilian currency BRBY, the real, strengthened 0.5 percent to 1.605 per U.S. dollar after a small retreat on Monday, trading around its strongest levels since January 1999. The dollar was also losing ground abroad after Monday's rise.

Traders said trade was thin in anticipation of the Federal Reserve decision on interest rates.

"People will hardly take any stronger positions before 3:15 p.m." local time on Wednesday when the Fed decision is announced, said Marcelo Voss, chief economist at Liquidez brokerage.

Interest rate futures <0#DIJ:> on the BM&F commodities and futures exchange in Sao Paulo retreated for shorter maturities and rose for some longer-term contracts.

In the stock market, traders said foreigners were mostly selling off Brazilian assets while awaiting the Fed's decision and skimming profits after a rally earlier this month.

Shares in banks like Unibanco (UBBR4.SA: Quote, Profile, Research) and Itau (ITAU4.SA: Quote, Profile, Research) weighed on the index. The shares fell 1.6 and 1.2 percent, respectively.

Food company Sadia (SDIA4.SA: Quote, Profile, Research) shed 2.7 percent to 11.63 reais in heavy trading volume.