Is investing in dollars worth it after it soars?

The dollar rose and approached R$5.30 this month, which is the highest level in more than a year, contrary to what analysts predicted for the North American currency until the end of 2024. Given this, investing in dollars is it worth it even given the notable recent appreciation? Is there still room to go further?

Financial planners consulted by Financial Intelligence they comment on the reasons for the recent appreciation of the dollar, how this benefits assets in Brazil and which types of investment benefit from this behavior of the most important currency in the world.

Reasons for the rising dollar

The recent surge in the dollar against the real and other currencies, especially emerging ones, is mainly related to the increased perception of risk in the world.

With the resurgence of tensions in the Middle East, an important region, especially for the price of commodities, the dollar gained strength as a security investment.

Furthermore, the US currency benefits from the rise in US future interest rates, which are responsible for the indexation of public bonds in the United States.

How could the rise in the dollar benefit Brazil in relation to investments in the financial market?

Therefore, investments linked to the dollar, if we take the stock market into account, have to focus on companies that gain from the rise of the US currency.

“So, for example, mining companies, because ore rises in line with the dollar”, says Rodrigo Cohen, CNPI analyst, financial planner and founder of Escola de Investimentos.

“In addition, you can, in the case of the stock market, invest in cellulose companies, which are also linked to the dollar. Some exporters too”, he adds.

In this case, therefore, companies in the iron ore sector are Vale (VALUE3)Usiminas (USIM5), Gerdau (GGBR4) and CSN (CSNA3).

BDRs

Investments in dollars outside Brazil are also on the agenda, such as shares on the New York stock exchanges, which can be acquired in Brazil via BDRs. In these cases, Tesla, Microsoft and Apple are those mentioned by Cohen.

Public and private securities abroad

Thus, in addition to United States stocks, American bonds also benefit from the rise in the dollar and vice versa.

“So, you can invest in bonds abroad, which yield in dollars. It is possible to get a good rate of 5%, 6%, 7% and even 8%”, details the founder of Escola de Investimentos.

These securities can be accessed via brokers or global banks.

So, through these institutions it is also possible to buy REITs, which are real estate funds from abroad.

“All these bonds will appreciate in value, in line with the rise in the dollar, for sure”, reinforces Cohen.

For Luciana Ikedo, financial planner, American fixed income remains interesting and has the lowest risks on the market. “It is possible to invest in securities with different investment maturities, which allows for good portfolio liquidity management”, adds Luciana.

Even if the dollar faces devaluation, American fixed income can still be a good option compared to variable income options.

“There is a risk of exchange rate variation, but profitability is agreed at the time of contracting, reducing the risk of price volatility compared to variable income”, says the expert.

What can change?

The scenario could change if the American economy starts to show signs of cooling down.

So, today it is growing well, which puts pressure on inflation and consequently on interest rates.

A change of scenery could reverse the situation.

“Data that shows that the economy there is not so strong could bring interest rates down more quickly. As a result, the US currency would depreciate around the world”, ponders Cohen.

Is investing in dollars worth it?

The recent increases, which brought the currency close to R$5.30, raised doubts about whether the dollar would experience a new wave of appreciation.

Today, the projections of the main market agents point to a dollar between R$5 and R$5.10 at the end of 2024, which would mean, for those who buy now, a devaluation from now on.

The most favorable moment seems to have been between the beginning of the year and the recent appreciation, until the second week of April.

“Last year, for example, the dollar fell close to 6% in the year so it was not a good investment”, recalls Cohen.

Between January and April the dollar jumped from R$4.85 to R$5.25. This was a boom that is unlikely to be repeated.

Is buying dollars a good investment?

Still, buying dollars is a good investment for the long term. Historically, the North American currency appreciates in relation to the real.

It is worth remembering that in 2012 when the dollar reached very low levels, the currency was at R$1.85.

What dropped the dollar below R$2 at that time was mainly the good moment in commodity prices and the appreciation of the real.

Something that shouldn’t happen now.

“Although we have seen high volatility in recent days, this type of investment continues to make sense for Brazilian investors who already have a solid portfolio built in Brazil”, says Luciana Ikedo.