What are the factors that affect the CAD to USD exchange rate graph?

1 answers

• Dec 24, 2021 · 3 years ago
  The CAD to USD exchange rate graph is influenced by a variety of factors. Interest rates play a significant role in determining the exchange rate. When the Bank of Canada raises interest rates, it attracts foreign investors seeking higher returns, which strengthens the Canadian dollar and increases the exchange rate. Conversely, when the Federal Reserve in the US raises interest rates, it can weaken the Canadian dollar and cause the exchange rate to decrease. Economic indicators such as GDP growth, employment rates, and inflation also impact the exchange rate. A strong Canadian economy with high GDP growth and low unemployment can lead to a stronger Canadian dollar and a higher exchange rate. Similarly, a robust US economy can strengthen the US dollar and cause the exchange rate to decrease. Market sentiment and speculation can also influence the exchange rate. Traders and investors closely monitor economic news, political developments, and market trends to anticipate future movements in the exchange rate. Overall, the CAD to USD exchange rate graph is influenced by a combination of economic, political, and market factors, and understanding these factors can help traders make informed decisions.
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