Saturday, April 16, 2011

Most countries of the world as of present consider United States dollar as the prime variable when it comes to foreign exchange rates and when it comes to measuring their currency’s competitiveness against the current global market.

For the past many years, the Canadian dollar has been competitive with its US counterpart. Since they are just a border difference from the United States, most of their transactions are done with the United States, and they therefore do their utmost to keep it that way. However, the Canadian dollar has begun to decline as of late, unlike during those times of the Civil War wherein Canadian dollar increased as much as $1.45 versus the former. Canadian dollar to US dollar exchange rate changes from time to time.

The dynamics of a currency are influenced by numerous factors such as labor productivity of a country as a whole, the stability of the prices of primary commodities or goods, the percentage of investments coming from both outside and inside the country and even actions from direct government officials. However, unfortunate issues such as Quebec remaining as a portion of the Canadian Federation can potentially pull down its value. Furthermore, the majority of Asian countries have been greatly affected by global recession making them uncertain market for Canada. This means that exports can gradually slow down and will affect the way investors and businessmen see the development of the currency. Because of this unstable situation, businessmen are considering the thought of gradually pulling out their stocks and investments and shift it to the United States just to be on the safe side of the market.

As of present, Canadian dollar is still keeping a firm stance against United States dollar but with the current condition of the economy, it may not stay that way for long. And there are no signs that the situation will become better anytime soon. Same thing applies when it comes to euro to Canadian dollar.


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