This is the current USD-BRL mid-market exchange rate. The Total Cost of buying foreign currency in the above table is calculated as the sum of all fees and the exchange rate margin, which is the difference between the provider's exchange rate and the mid-market USD-BRL exchange rate.
Whenever you are researching a particular exchange rate you are actually interested in two currencies as the value of a currency must always be quoted relative to a second currency.
So it follows that if you are determining the best time to transact, in this case the USD vs BRL, you should pay attention to both United States Dollar and Brazilian Real news and forecasts.
In the third week of April the Dollar Index was rallying strongly towards the mid-97s, slightly below major resistance at 97.70, a break of which would be massively positive for the greenback. The index was up 1.7 percent year-to-date.
The dollar’s strength comes in spite of a dovish surprise in March from the Federal Reserve, which ditched two interest rate hikes from its 2019 projections. Fortunately for dollar holders, the rest of the world has problems and other important central banks also turned dovish, removing much of the incentive for selling USD.
Bloomberg research warned in April of potential for a large upcoming move in the US dollar, up or down. Over the past quarter-century, three prominent troughs in the JPMorgan Global FX Volatility Index were followed by dollar moves over 6-month periods worth 10-15 percent. The index was trading in mid-April at a 5-year low.
2018 was a disappointing year for the Brazilian real: it lost 15 percent of its value against the US dollar and more than 10 percent against the euro.
The real started 2019 brightly: by early February, it held a year-to-date gain worth 7 percent against the dollar. Throughout February and into March, the real weakened somewhat, but then on March-22 (the day of this report), it plunged on news that former Brazilian president Michel Temer had been arrested on corruption charges — an arrest that might impede the pension reforms that analysts say are vital to Brazil’s economic recovery. A one-day fall of 3 percent following the arrest had the real down on the year, at R$3.9 per USD. A push back towards the R$4.0 handle, last seen in September, is now likely.
In March, Brazil’s central bank adopted a dovish tone and lowered its forecast for average interest rates, further burdening the real.
Despite these issues, one analyst said that he was putting capital into the real because of the “textbook” nature of the current environment, which favoured carry trades and the high-yielding currencies upon which these are based, like the real.
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