Exchange Rate On Canadian Dollar To Us Dollar
As of September 2021, the exchange rate on Canadian dollar to US dollar is 1 CAD = 0.79 USD. This means that one Canadian dollar is equivalent to 0.79 US dollars. The exchange rate is constantly changing, and it is affected by various factors such as economic policies, political stability, and international trade.
Factors that Affect the Exchange Rate
1. Economic Policies
The economic policies of a country have a huge impact on its exchange rate. For example, if a country has high-interest rates, investors will be attracted to invest in that country, causing a high demand for its currency. This will lead to an increase in its exchange rate.
2. Political Stability
The political stability of a country is also an important factor that affects its exchange rate. If a country is politically unstable, investors will be hesitant to invest in that country, causing a decrease in demand for its currency. This will lead to a decrease in its exchange rate.
3. International Trade
The level of international trade between two countries also affects their exchange rates. If a country has a high level of exports, there will be a high demand for its currency, causing an increase in its exchange rate. On the other hand, if a country has a high level of imports, there will be a low demand for its currency, causing a decrease in its exchange rate.
Impact of Exchange Rate on Economy
The exchange rate has a significant impact on the economy of a country. Here are some of the impacts:
1. International Trade
The exchange rate affects the competitiveness of a country's exports and imports. A low exchange rate makes exports cheaper and imports more expensive, making it easier for a country to export its products and reduce its imports. On the other hand, a high exchange rate makes exports more expensive and imports cheaper, making it difficult for a country to export its products and increase its imports.
2. Inflation
The exchange rate affects the inflation rate of a country. A low exchange rate can lead to inflation as it makes imports more expensive, which increases the cost of production. This will lead to an increase in the prices of goods and services. On the other hand, a high exchange rate can lead to deflation as it makes imports cheaper, which reduces the cost of production. This will lead to a decrease in the prices of goods and services.
3. Investment
The exchange rate affects the level of investment in a country. A low exchange rate attracts foreign investors to invest in a country, as they can get a higher return on their investment. On the other hand, a high exchange rate makes it less attractive for foreign investors to invest in a country, as they will get a lower return on their investment.
Conclusion
The exchange rate on Canadian dollar to US dollar is constantly changing, and it is affected by various factors such as economic policies, political stability, and international trade. The exchange rate has a significant impact on the economy of a country, affecting international trade, inflation, and investment. It is important for individuals and businesses to understand the exchange rate and its impact on the economy.