The mid-year holidays are approaching and many take advantage of the period to travel abroad, especially to places in the Northern Hemisphere, where it is summer. After some lows in recent weeks, the US currency, the main currency for international transactions, ended up 1.10%, at R$ 4.80 this Wednesday (1st).
With so much recent ups and downs, experts interviewed by CNN Brasil Business claim that this is the time to buy the US currency if you have any trips planned abroad – regardless of the date.
Victor Beyruti, economist at Guide Investimentos, believes that this is the right moment, even if it is to buy 50% of the amount that will be used because, if it falls further, you will be able to make the other installment at a more attractive price.
He points out that a fair dollar today is around R$ 4.82. Thus, “the real is closer to the maximum against the dollar”.
Leandro Otávio Sobrinho, founding partner of Raise Investor, also emphasizes that it is important to dollarize at all times, whether for a trip or for an investment, “since it is impossible to predict the market trend”.
In any case, he suggests doing it gradually, so that Brazilians are not caught in an unexpected cycle of highs or lows. What will depend, according to Otávio Sobrinho, is the period that the trip is scheduled.
“If you are far away, do a part now [para aproveitar a cotação] and another part in a few weeks or months. However, if the trip is in the next few days, then it will depend on the person’s urgency regarding the dollar”.
Marcelo Oliveira, CFA and founder of Quantzed, also says that it is always time to buy dollars, regardless of the reason, because, historically, the “real depreciates over time due to inflation.”
Since the real was created in 1996, its exchange rate against the dollar has gone from R$1 = US$1 to almost R$6 = US$1.
Understand currency movement
The dollar dropped at the beginning of the year and until the beginning of May due to the positioning of the Federal Reserve (FED, or central bank of the United States) to increase interest rates to control inflation.
Americans see inflation, which is near 40-year highs, as the main problem facing the country today. The US central bank is tasked with deflating inflation from 8.3% to its target of around 2%.
Otávio Sobrinho explains that the Fed’s position points to a scenario of uncertainty and greater aggressiveness for investors. Thus, the investor chooses to take less risk and dollarize their investments, taking capital from emerging countries, such as Brazil.
However, he explains that, due to the Federal Reserve’s latest position, of still increasing the interest rate, but in longer periods, the investor begins to be a little more willing to risk, looking for Brazil.
Thus, the price of the Brazilian currency began to retreat against the dollar. In May, the dollar fell by around 6.9% against the real.
Future
On the other hand, experts stated that it is impossible to predict how the currency will perform in the coming days, weeks or months. “Guessing the direction of the coin is the hardest thing in the market,” says the founder of Quantzed.
But he remembers that the currency has already touched R$ 4.60. “To get anywhere near that figure, the Fed’s speech must continue to be moderate.”
On the other hand, the founder of Raise Investor also comments that Brazil will go through an election period in October, which makes it even more difficult to predict the currency’s performance.
“We need to understand how the market will price this scenario; It will be a year of many surprises for both the stock market and the US currency”.
Source: CNN Brasil
I am Sophia william, author of World Stock Market. I have a degree in journalism from the University of Missouri and I have worked as a reporter for several news websites. I have a passion for writing and informing people about the latest news and events happening in the world. I strive to be accurate and unbiased in my reporting, and I hope to provide readers with valuable information that they can use to make informed decisions.
