Why is the American Dollar so Expensive in Brazil Nowadays?

One interesting topic in economivcs is the Dollar exchange rate. To understand how this works in an easy and fast way, you have to keep in mind the basic law of supply and demand. If few companies invest money (dollars), in Brazil for instance, there is access to more dollars. If there are more dollars in Brazil, the price is lower.

Another important law in Economics that influences the currency value is the Trade Surplus Law. It states that it is better for a country to keep the balance of trades positive. If Brazil exports more than imports, the Real becomes stronger.

Photo Source: Wall Street Journal

Something else that affects the dollar rate is how much money tourists exchange in Brazil. If more tourists come to the country, in the summer, or during Carnaval, they will have to exchange dollars for reais and that helps the Brazilian economy.

Also, if the Brazilian interest - extra charge for money borrowed - is high, it is attractive for foreign companies to invest money in applications here. So, there would be more dollars available in the market.

All in all, economy is all about understanding these laws and their applications.