Gain / loss on your dollars
+$1,088
10.88% of starting capital · before taxes
WORKSPACE CARRY TRADEUSDBRL
TWO CURRENCIES. ONE BIG VARIABLE.
Earn the spread. Mind the real.
Explore what happens when dollars chase Brazilian yields—and the exchange rate moves.
HOW THE TRADE WORKS
The interest is in reais. Your result is in dollars.
A classic carry trade borrows in a lower-rate currency and invests in a higher-yielding one. For USD → BRL, you convert dollars into reais, earn a BRL return, then convert back and repay dollar funding. Using your own cash has the same currency exposure, with a USD investment as the alternative.
01 · Start in USD
$10,000
Your cash; compare with staying in USD.
02 · Convert to BRL
R$ 49,500
After $100 modeled costs, at 5.00 BRL per USD.
03 · Earn in Brazil
R$ 55,440
12% annual yield held for 12 months.
04 · Convert back
$11,088
At 5.00 BRL per USD, before taxes.
YOUR ASSUMPTIONS
Move the levers.
Illustrative inputs, not live quotes or an investment forecast. Policy rates are reference points, not available retail yields or borrowing offers.
Example position size; no additional leverage is modeled.
Annual effective yield, held constant. Enter the actual instrument’s yield.
The annual effective yield you could earn while staying in dollars.
Rates compound annually with fractional years; no coupon withdrawals.
Positive = more reais per dollar = weaker BRL. This reduces your dollar proceeds.
Round-trip FX spreads, fees and custody, simplified as one upfront deduction. Taxes are excluded.
Illustrative 5.00 by default. Changing the starting quote changes BRL amounts; with the same percentage FX move, USD returns are unchanged.
Keeping it in USD
$10,500
5.00% annual effective alternative yield
Break-even currency move
+5.60%
USD/BRL move that erases the advantage over USD
THE DOLLAR OUTCOME
Brazilian proceeds vs. staying in dollars
The green line includes BRL interest, currency movement, and modeled fees. The blue line is the USD alternative.
● Converted BRL proceeds┄ USD alternative
The currency move is spread evenly across months for illustration. The endpoint uses your selected exit move. Real FX paths can be volatile; margin calls and early liquidation are not modeled. Returns are nominal, before taxes.
WHEN THE SPREAD DISAPPEARS
A higher yield can still lose in dollars.
Excess return versus the USD alternative turns negative when USD/BRL rises beyond 5.60%. This is an exchange-rate quote change, not the percentage fall in the value of one real.
Horizontal axis: USD/BRL change over the entire holding period. Dashed vertical line: your scenario. This is a scenario curve, not a probability distribution. Borrowed results are percentages of the loan notional, not returns on equity.
THE REAL MOVES
USD/BRL hasn’t stood still.
Historical daily quotes since 2020. A rising line means more reais are needed to buy one dollar.
Loading published exchange rates…
FROM LEARNING TO A REAL-WORLD CHECK
How to investigate getting started
Access depends on where you live, your tax status, and the instrument. Start by comparing an unleveraged BRL investment with a USD alternative; borrowing adds funding, collateral, and liquidation risk.
- 01
Choose the exposure, then confirm access
Ask a regulated bank or broker whether it accepts your residency and offers BRL-denominated Brazilian government debt, deposits, or funds. Confirm the instrument actually carries BRL exposure: a Brazil issuer’s dollar bond is a different trade. Nonresident arrangements require an eligibility check; a standard domestic retail account is not universal.
- 02
Get executable quotes for both legs
Request the actual BRL yield and maturity, USD funding cost or alternative yield, entry and exit FX spreads, custody charges, and withdrawal terms. Selic and the Fed’s rates provide context; they are not rates you can automatically borrow or invest at.
- 03
Price taxes, access, and an early exit
Confirm identification and account requirements, tax treatment in both jurisdictions, remittance charges, and repatriation procedures with the provider and a qualified adviser. Check credit quality and what selling before maturity would do to the bond price. This model excludes taxes, defaults, and bond-price movements.
- 04
Stress-test before committing
Replace the example inputs with your quotes. Test a weaker real, lower reinvestment yields, and higher USD funding costs. For borrowing, understand collateral, margin calls, variable rates, and the repayment date. A currency hedge has a cost; the unhedged interest spread is not a guaranteed hedged return.
See the math and model limits
USD proceeds = starting USD × (1 − cost %) × (1 + BRL yield)^(months / 12) ÷ (1 + USD/BRL change). The starting FX quote cancels from percentage returns. USD alternative or loan balance = starting USD × (1 + USD rate)^(months / 12).
Own-cash gain = proceeds − starting USD. Excess gain / borrowed-dollar profit = proceeds − USD alternative or loan balance. Break-even USD/BRL change = (1 − cost %) × [(1 + BRL yield) / (1 + USD rate)]^(months / 12) − 1.
Rates are assumed constant and annual effective, with reinvested interest. Costs are charged once upfront; the borrowing amount is not reduced. No taxes, leverage beyond the stated loan, collateral, margin calls, credit losses, inflation adjustment, hedging, or mark-to-market bond losses are modeled. The examples explain mechanics and do not recommend a particular investment.