Short-term volatility and the long-term trend of the Canadian dollar on the foreign currency market
by Rayan Chelli; Muhammed Kabir
International Journal of Management Development (IJMD), Vol. 1, No. 3, 2016

Abstract: Many factors affect the value of the Canadian dollar, such as expectations, commodity prices, budget and current account deficits, debt ratios, interest rates, political stability, and speculation. Because the Canadian economy heavily relies on foreign trade and investment, fluctuations in the value of the Canadian dollar have far-reaching implications for the nation's economic growth and stability. In this thesis, an attempt is made to understand the complex nature of the foreign currency markets and how the Canadian dollar has performed in the last three decades. The study has found that commodity prices, interest rate differentials, diverging inflation rates, and political events all have significant influence on the value of the dollar. The relative impact of each in part depends on the time horizon analysed.

Online publication date: Thu, 12-May-2016

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