The Canadian dollar (CAD) is the official currency of Canada. It is subdivided into 100 cents. The dollar has been the currency of Canada since 1858. It is issued by the Bank of Canada. The symbol of the currency is $.
The Canadian dollar is a floating currency, which means that its value is determined by supply and demand in the foreign exchange market. The Bank of Canada can influence the value of the dollar by buying and selling it on the open market.
The Canadian dollar is used for all transactions in Canada, including purchases of goods and services, payment of wages and salaries, and payment of taxes. The dollar is also used for international trade and investment.
Here are some of the factors that can affect the value of the Canadian dollar:
* The price of oil: Canada is a major exporter of oil, and the price of oil can have a significant impact on the value of the dollar. When the price of oil is high, the dollar tends to strengthen. When the price of oil is low, the dollar tends to weaken.
* The interest rate: The interest rate is the price of borrowing money. When the interest rate is high, it makes it more expensive to borrow money, which can be a drag on the economy. This can lead to a weaker dollar. When the interest rate is low, it makes it cheaper to borrow money, which can be a boost to the economy. This can lead to a stronger dollar.
* The political climate: The political climate in Canada can also affect the value of the dollar. If there is political instability in Canada, investors may be reluctant to invest in the country, which can lead to a weaker dollar. If there is political stability in Canada, investors may be more confident in investing in the country, which can lead to a stronger dollar.
* The exchange rate and value of the United States dollar: The exchange rates of the Canadian and U.S. dollars are closely linked because of the large amount of trade between the two countries. When the U.S. dollar is strong, the Canadian dollar tends to weaken. When the U.S. dollar is weak, the Canadian dollar tends to strengthen.
The Canadian dollar is a complex currency that is influenced by a variety of factors. It is important to understand these factors before trading or investing in the dollar.
