The dollar, which exceeded the R $ 6.00 mark less than a year ago, has dropped by 11% in 2025 and is now at its lowest level since June 2024.
If you plan to travel soon, it’s best to buy currency gradually instead of all at once to benefit from the average exchange rate over time.
To calculate the average exchange rate for your trip, divide the total amount you plan to take by the number of months until the trip. For instance, if you intend to take $10,000 for a trip to the US at the start of the upcoming year, you could buy $833 every 15 days or $1.67 thousand monthly over the next six months.
The current average exchange strategy is benefitting from unprecedented support in nearly two decades, with interest rates at their highest since 2006. Pairing high returns from investments tied to the Selic rate with regular purchases of foreign currencies will aid in managing travel expenses.
With the Selic rate at 15% annually, investments tied to the CDI can yield around 1.17% per month, regardless of the specific investment vehicle.
To clarify, we will illustrate this with a $10,000 scenario split into six payments of $1.67 thousand each, based on an estimated average US currency rate of $5.44 over the next six months.
To simplify the accounting process, let’s assume that you have correctly invested R $ 54.4 thousand to purchase $10 thousand at the average exchange rate used here. By the end of the first month, the R $ 54.4 thousand will have increased to R $ 55 thousand.
Spend $1,670 per month for the next six months to achieve the target. By the end of this period, you will see that the investment has generated an additional $2,200, equivalent to $425 extra in your travel fund, representing a 4.25% increase.
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A 4.25% increase over six months is notable. To offset this return due to exchange rate fluctuations, the dollar would have to appreciate to an average exchange rate of R$ 5.66, meaning it would need to reach around R$ 6 by the year’s end.
The situation appears less probable due to anticipated interest rate cuts in the U.S., which decrease the value of the dollar, as well as the substantial American debt, making their public bonds less appealing and also putting pressure on the dollar.
The possibility of Selic increasing significantly is not impossible, as the market anticipates a continued weakness in the dollar in the upcoming months, according to Michael Viriato, chief strategist and partner at Investor House.
The main focus is on ensuring that the average exchange strategy succeeds in safeguarding your finances from the fluctuations of the US dollar.
The market anticipates that the average exchange rate will increase significantly if the trajectory of the Selic rate follows the projected path over the next year. The Central Bank has indicated that, barring any unexpected developments, it intends to maintain the Selic rate at 15% for an extended period of time.
The Focus Bulletin predicts that the interest rate will increase by 15% in 2025 and by 12.5% in 2026, resulting in an average Selic rate of 14% over the next year.
To cancel it, the average exchange rate for that period would need to rise to R $ 6.20. This would imply a “closing exchange rate” of R $ 6.84 for the final month, a figure significantly higher than what Focus predicts, which is R $ 5.70 by the end of next year.
Protection of medium exchange
One might question the rationale behind exchanging money in advance. However, it is not advisable to wait until the last minute to convert funds into foreign currency due to the unpredictable nature of exchange rates. Delaying the exchange could essentially be seen as a gamble, with the risk of incurring losses if the currency value rises unexpectedly.
In 2024, the dollar started the year at R $ 4.84 and ended December at R $ 6.18, marking an increase of 27%. By the second half of the year alone, the value of the US currency surged to 10.75%.
Those who bought US dollars monthly between July and December 2024 received an average exchange rate of R$ 5.78. Those who purchased the currency at the end of December got an exchange rate of R$ 6.18, which was 7% higher than the average rate.
You could have also benefited from the high interest during that time, just like you can now. By combining the average dollar and the fixed income linked to CDI, you could have gained 10.5% more than someone who converted their reals only at the end of the year without any prior investments.
It might be tempting to wait for the dollar to drop closer to your travel date, but it’s not a wise decision. The best approach is to stick to the average exchange rate, especially when combined with fixed income investments.
Patrícia Palomo, a certified financial planner, is appreciated for her assistance.
