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Exchange Rate Canadian Dollar

The exchange rate Canadian dollar is based on a number of different market indices that take place in Canada. Because you are delay changing an influx, the currency exchange rates that are associated with the country are also constantly moving up and down. This is true not only for Canada but for all of the other countries in existence in the world today. Inflation can play a major role when it comes to setting the foreign money exchange rate for any country, including Canada. When there is too much Canadian money available, indicating a very high supply, many times the value of that money declines because of inflation. This means an increase in the cost of goods because the Canadian dollar is not worth what it once was. Exchange Rate Canadian Dollar at WorkOne can better see the exchange rate Canadian dollar at work by taking into consideration an easy example. Suppose Canada is undergoing a time of inflation and the Canadian dollar is considered to be particularly "weak" when compared to other currencies. A shoe store that purchases shoes from Italy in order to sell them to its Canadian customers will have to pay higher prices for their shoes because of the change in the currency exchange rate. In January, the shoe the company could spend 1 million Canadian dollars on purchasing Italian shoes at an exchange rate of 1 dollar to .64 Euro dollars for a purchase price of 640,000 Euro dollars. If the Canadian dollar weakens six months later to a rate of 1 dollar to .50 Euro dollars, the company would have to spend 1.28 million dollars to make the exact same purchase that was made to six months earlier. This increase in cost will be passed along to the consumer.

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