What’s better for canada a lower dollar or strong dollar and why?
like in this moments the currency are low but 5 month ago the dollar was strong,what’s better for the economy in canada and what’s the ideal price to dollar canadian and amrican dollar because today we are in 78 cents for 1 american dolar………what do you think
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This is a tough question, and I think the answer has two parts.
In the short term, a balanced dollar is best. Policies that seek to manipulate the exchange rate in one direction or the other can have unintended consequences. Additionally, a weak dollar would often be caused by a weak economy, which could benefit from increased exports that might happen because of a weak dollar. A strong dollar reduces the realized cost of imports. This leaves more money for luxury goods, which should help to continue expansion. But this could also lead to move jobs oversees, which has a cooling effect on an economy.
Long term this should result in a stronger dollar which is positive.
In the past few years, the US followed a monetary policy that saw the dollar drop relative to other currencies. The obvious goal of this was to extend the economic expansion. This was to some extent achieved, but kind of in the way that daylight savings time gives you more daylight. It was inflationary, and when the fall came, it was probably much harsher than it would have been had we allowed the economy to slow naturally a couple years ago. And we would be better off today had that happened.