Why does the value of Canadian currency depend on what the U.S. decide is ‘fair market value’?
As an independent nation, shouldn’t Canada be able to make the final call on what the Canadian dollar (the Loonie) ought to be valued at, considering what Canada exports to the U.S., against the U.S. dollar? What’s YOUR Opinion?
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The value of a nation’s currency is determined by market forces such as debt levels, budget deficits, and trade balances. The more demand for a nation’s currency the stronger it gets.
That’s why, under Bush, the American dollar has plummeted drastically. No one is excited about holding dollars with W in charge.
It doesn’t.
Your question indicates a lack of understanding regarding global currency markets and their impact on the value of all currencies.
Well, fair market value is determined by supply and demand, not by any policy maker in the US or anywhere else.
On the other hand, it’s amusing that people think the US just makes up arbitrary rules for the rest of the world.
It doesn’t work that way. The Canadian Dollar is just compared to the U.S. dollar in Canadian media as a point of reference. A lot of Canadian businesses export to the U.S., so the comparison is very relevant to them.
Here is an article that discusses Canadian Monetary policy:
http://www.thecanadianencyclopedia.com/PrinterFriendly.cfm?Params=A1ARTA0005380