When interest rates rise outsiders will be more likely to invest in Canada as they would be getting more dividends, transactions in Canada are carried out in Canadian currency, so more outside investments means more conversion to Canadian currency thus demand for Canadian dollars increasing and thus the value appreciating

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I was told by some people and some news sources that it may rise again to 1.10, but that was about 3 weeks ago, and now those speculations seem to have weakened with the possible lowering of the canadian interest rate. what do you guys think?

It may take a few weeks, however the economic indications are, that it will again approach the 1.10 area before too long.

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What will the bank of canada do to interest rates please answer this in plane english.

The Bank of Canada generally allows the dollar to value itself, and there are a good deal of factors that influence the value of the dollar. If the dollar's value increases, the BoC could lower interest rates. Let's say the interest rate in the US and Canada is 2%. If the BoC lowers its rate to 1.5%, foreign investors (Let's say some guy in the UK) would be more likely invest in the US than Canada, as the interest earned on the investment would be higher. The UK investor therefore would exchange British Pounds for US dollars to make the investment, instead of Canadian dollars. Because there is now less demand for Canadian dollars, the value of the dollar decreases, and the value of the US dollar increases. As it stands today, the interest rate in Canada is 0.5%. The BoC does not have a lot of room to lower interest rates further. It issued a statement a couple of weeks ago indicating that the recent increases in the Canadian dollar could make it harder for Canada to come out of the recession. This statement in itself lowered the dollar a couple cents as investors don't like risk and therefore will invest in countries with strong economies.

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Does this logic make sense? (all other factors assumed to be unchanged) canadian interest rates going up will cause the canadian dollar to appreciate relative to the usd. as the usd depreciates, commodity prices rise and as the canadian economy is strongly correlated to commodity prices, stocks also rise. (yes or no will suffice as an answer)

If the Canadian interest rates rise than investing in stocks will be less attractive in comparison to more assured interest bearing investments such as bonds, and GIC's. Also it becomes more costly to leverage your trades with borrowed money. If the Canadian interest rates go up, the Canadian stocks will go down or at least slow their climb. In general, if increased interest rates increases inflation then the Canadian dollar would devalue but in these economic times, it's more likely to bolster the Canadian dollar. Canada is a net exporter to the States and as the USD depreciates, Canada's exports will suffer. Basically commodities from Canada will be more expensive to Americans so they will purchase less, if the USD depreciates, US stocks will rise. Canada's stock market may fall with the depreciation of the USD but that is not a given, the trade between Canada and the US is mostly commodities and resources but is complex enough that you can't really can't make that generalization, remember that a depreciation of the USD leads to an increase in Commodity prices in terms of the USD and a decrease in terms of the CAD. The general tendency from Canada's perspective is that a decrease in the USD means a decrease in commodity prices and a decrease of exports to the US and a decrease to Canadian stocks. Although Canada/US trade has traditionally been 80% of Canada's trade, trade with China has become increasingly important to Canada so these generalizations don't hold as well as they used to. To illustrate the increasing influence of China in Canada, the local news in Calgary is also available in Mandarin albeit on a cable channel.

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Toronto (cp) - the canadian dollar will be worth as much as the u.s. greenback by the end of the year, cibc world markets economists predict (tsx: cm.to). friday's report cites an expected rise in canadian interest rates and stronger-than-expected economic growth, along with hot commodity prices and an "avalanche" of corporate takeovers that require foreign acquirers to deal in canadian dollars. "with the national jobless rate plumbing 30-year lows and core inflation now bobbing above the bank of canada's target range, our earlier assumption of the bank of canada intervening against a further rise in the canadian dollar with rate cuts no longer seems tenable," says cibc world markets chief economist jeff rubin. in fact, he says the central bank will likely welcome a further rise in the currency, which was trading friday morning at a three-decade high of over 93.7 cents us. the lower our dollar compared to the us the better for our manufactures - this isn't good new

we have decided as americans to let our children and grandchilden worry about paying for the war

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Indicate whether each statement is true, false or uncertain and provide a brief explanation. if u.s. interest rates rise relative to canadian interest rates, the canadian dollar will appreciate.

False. Since holders of dollars can then earn a higher rate of return on their savings due to the increases interest rate, more Canadian dollars will be sold to buy US dollars. As a result, the Canadian dollar depreciates, but the US dollar appreciates.

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Mon oct 29, 11:55 am by the canadian press advertisement toronto - the seemingly unstoppable canadian dollar traded at a 47½-year high monday, hitting 104.69 cents us late in the morning. that's a gain of three-quarters of a u.s. cent since friday as the currency hit a level unseen since early 1960 - when john diefenbaker was prime minister and dwight eisenhower was still in the white house. the loonie has risen more than 18 cents us this year, as several factors converged to drive it to parity with its u.s. counterpart and beyond, including record-high oil prices and a weak greenback. another element hurting the u.s. dollar, in relation to the loonie and other currencies, is the likelihood that the u.s. federal reserve will cut interest rates again this week in an attempt to boost the american economy.

The Federal Reserve controls the value of the dollar by how much, or how little, is in circulation. This is because the dollar was taken off the gold standard and in 1933 the american public was ordered to return any and all gold coin etc. to the government under penalty of 10 years imprisonment. It was the greatest robbery against the american people in history. The legislation that was drafted which created the federal reserve was written by bankers, not congress. it was voted on in secret while the rest of us were on christmas holiday. It is the small groups of international BANKERS that control the federal reserve, not the government. It is about as federal as Federal Express. They deftly control interest rates to meet their goals and objectives. In doing so, they guided and controlled the market crash of 1907, the depression of the 1920s, and the recession of the 1980s. And that is not all. The falling dollar will effect so much more than just the american economy.

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1.the foreign exchange market is where (10 points) currencies are exchanged services are exchanged goods are exchanged capital is exchanged 2.the foreign exchange rate is defined as the (10 points) price at which one currency exchanges for another rate or the speed which the currencies of the world are traded volume of the world currencies traded none of the above 3.when a currency decreases in value relative to another currency the currency has (10 points) depreciated decelerated appreciated accelerated 4.assume yesterday one u.s. dollar exchanged for 115 yen. today the same dollar exchanges for 110 yen. we can conclude that the (10 points) dollar has appreciated relative to the yen dollar has depreciated relative to the yen yen has appreciatied relative to the dollar both (b) and (c) are correct 5.when a currency depreciates, its value has (10 points) remained constant against that of another country fallen relative to another currency risen relative to another currency fluctuated around a particular value 6.when the u.s exports goods and services to france, there is an increase in the (10 points) supply of dollars supply of euros demand for dollars both (b) and (c) are correct 7.in the forex, which of the following increases the demand for dollars (10 points) japanese interest rates rise relative to the u.s. interest rates the expected future exchange rate falls the u.s. interest rate increases both (a) and (c) are correct 8.inflation rate in the u.s. is higher this year relative to the inflation rate in europe. what happens to the value of the dollar in the forex (10 points) the dollar depreciates; the euro appreciates the dollar appreciates; the euro depreciates the dollar depreciates; the euro depreciates you can't tell without knowing the inflation rates 9.assume that gdp growth in canda is higher than that of the u.s. gdp growth rate. what happens to the value of the canadian dollar relative to the u.s. dollar (10 points) canadian dollar appreciates canadian dollar depreciates the u.s. dollar appreciates both (b) and (c) are correct 10.the japanese develop a cure for baldness and that cure is only available in japan. what happens to the value of the dollar relative to the yen (10 points) the dollar depreciates and the yen appreciates the dollar appreciates and the yen appreciates the dollar appreciates and the yen depreciates the dollar depreciates and the yen depreciates

1. currencies are exchanged 2. price at which one currency is exchanged for another 3. depreciated 4. both b and c 5. fallen relative to another currency 6. both b and c 7. us interest rate increases 8. dollar depreciates; euro appreciates (assuming PPP holds) 9. both b and c 10. the dollar depreciates and the yen appreciates

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How do the governments and banks control inflation? what causes inflation? are interest rates related to inflation or deflation? someone was telling me that governments exchanges say canadian dollars for indian currency and then wait for their currency to rise and then tthey exchange it back? how does this cause inflation or deflation? when there is more demand than supply is there a surplus or a defecit?

Government has inflation policies to help fight inflation.. in australia the inflation aim is 3-4% i think. research the inflation policies, for example they might raise tax , or raise indirect tax.. thats how they stop inflation (tax) banks control inflation by raising interest rates (stops people from spending as much), they do it gradually at a time, say raise it a quarter every month or so other wise if they raise it heaps in a month then no one has time to adjust causing more inflation & unemployment. inflation is caused by people spending too much money (high employment), it could also be caused by someone asking for a pay rise, then the company needs to increase there prices, & then the cycle happens again (prices rising) & then you cant afford the stuff. or it could be the opposite where the prices rises first and people cant afford so they need to ask for pay rises. inflation is caused by pretty much people spending too much. so there is more demand for the product, so the shops raise prices. yes interest rates are related, it could stop inflation but at the same time if they raise it too much and too quickly it could also cause inflation . umm no idea. i know that if you spend your money on stuff from other countries then it reduces inflation in your county. but since like eveery county in the world is doing bad except australia, noone is having high inflation.. all low. australia 's central bank just raise interest rates from 3% to 3.25%

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Describe three fiscal policy options for the federal government that are (i) contractionary and (ii) expansionary. contractionary policy 1. 2. 3. expansionary policy 1. 2. 3. b.when would the federal government involve each of these two kinds of policy and what would be their effects on the federal budget? c. list briefly describe at least three problems and/or criticisms associated with implementing fiscal policy what effects would each of the following events have on aggregate demand or aggregate supply? will the event primarily affect aggregate demand or aggregate supply? will it cause an increase or decrease? assume all other things remain constant. a. a general improvement in us technology b. the deportation of a significant number of illegal immigrants c. households expect a future rise in prices d. an increase in china's purchase of u.s. products. e. a 12% increase in nominal wages (with no change in labor productivity) f. a decrease in interest rates at each price level g. congress relaxes several antipollution laws h. an increase in u.s. purchase of canadian products. i a nuclear power meltdown kills thousands, and all nuclear plants are shut down while that accident is investigated j. an appreciation in the american dollar

A: Contractionary Policy: Decrease in income or lowering wage rate Decrease government spending Increase taxes Expansionary Policy: Increase exports/Decrease imports Increase government spending Lower taxes B: In contractionary policy, the federal budget lowers, and in expansionary policy the federal budget raises. C: Problems with fiscal policy: It takes a long time because it requires a bill to be passed. It can be difficult to pass it because a lot of people have to agree to it. It can be vetoed. By the time it passes it can be too late. It is hard to determine what exactly to do, because the economy is always changing, and they have to predict what will be needed by the time it passes. D: a) Technology generally increases supply b) Increase in demand because American citizens would replace all the illegal workers and more workers (that are accounted for) increases demand. c) Future rise in prices causes demand to shift left d) Demand shifts right. e) Demand shifts right. f) Demand shifts right. g) Supply shifts right. h) Demand shifts left. i) Supply shifts left. j) Demand shifts right.