Understand the variation of the dollar

Understand the variation of the dollar , find out how and why this happens in a simple way, and what it can have on the consumer's pocket.

In addition to affecting the pockets of Brazilians who most enjoy traveling, the variation in the dollar directly impacts the price of other products. Supermarket is one of them, and the one that causes the most astonishment to everyone.

However, stay tuned for the next paragraphs, where we will try to resolve all doubts and make you understand the variation in the dollar.

Tourism or Commercial

Firstly, we must understand that there are two types of dollars, the tourism and commercial.

Tourism can be done by individuals. It happens when we exchange our money for dollars.

Due to the smaller amount invested, it becomes more expensive.

Finally, we have commercial dollar. Executed by companies and financial institutions. This mode tends to be cheaper, due precisely to the large quantity moved.

In fact, when we watch news about the dollar variation, the information provided is precisely from the commercial dollar. Because it is he who affects the entire economy.

About the variation of the dollar

Now, in a simpler way, we will make understand the variation of the dollar.

Basically, the commercial dollar It is used in various situations such as government and bank commercial transactions, for buying and selling goods.

Imports and exports are also included in purchases and sales. Because of this, basically, the variation in the dollar is caused by supply and demand in the market.

However, when there is a surplus of dollars in the market, the variation drops the price. When more people buy dollars, it goes up.

Dollar rise

But why dollar rise? There are a few reasons why this happens, we will mention the main ones.

Trade balance deficit: This happens when Brazil imports more than it exports. As a result, the supply of the dollar decreases, which causes it to rise.

Spending abroad: A greater number of people exchange their money for dollars, causing them to spend more money outside Brazil.

High interest rates in the United States: the dollar also rises when there is a rise in American interest rates. Making investors from Brazil take their money outside the country, in order to earn more.

And when the dollar falls?

In the same way, the reasons why the dollar falls are basically the same, just in reverse.

Trade surplus: This happens when more Brazilian products are sold abroad, more dollars enter our country, thus increasing supply.

Foreign spending: With the high number of visits by foreigners to the country, and high spending, this causes the currency in our country to grow.

Interest rates in Brazil: When Brazilian interest rates rise, it is worth it for American investors to invest the currency in our country.

Rising dollar, what are the impacts?

The economy in the world is very dynamic. Making the dollar variation be constant.

If the market has the perception that the country is going through political turmoil, for example. The tendency is for its investors to stop investing and take their money out of the country.

On the other hand, if the government shows that it is being fortified, more coins are invested. However, the relationship between other countries can affect the variation in our country.

And what are the effects?

However, the first to be affected are those who are traveling. Causing an impact on ticket prices and exchange offices.

However, in the medium and long term, the variation in the dollar affects the final consumer's pocket.

Large companies, generally those that import products, pass on the high expenses in their final value. In this way, it affects inflation, and the consumer feels it in their pocket.

However, Brazilian products can also benefit. With the dollar rise, makes Brazilian products sold abroad have a more competitive price.

Finally, it is important to highlight that, in the economy, the scenario that has the most advantage changes according to the circumstances and objectives of each country.

But why is the dollar so important?

Many Brazilians question the importance of the dollar, since our currency is the real.

This happens because the dollar is the most referenced currency in the world, and has the most value.

Even though the United States is going through a crisis, the dollar is still trusted by all investors.

The United States gained strength in the 20th century, when after the wars, the country invested heavily in foreign trade. With this, the strengthening of its economy shortly after the world wars in Europe.

However, banks and investors have high reserves of the dollar, meaning that everything that happens to it changes all currencies.

Conclusion

Basically, we hope you understand the variation in dollar, and all its impacts.