What makes the value of our Canadian dollar go up and down? Well, our dollar is very reliant on the US as they are our biggest “customer” when it comes to our exports. We export materials like wood, coal, and wheat. Interest rate also affects how well our dollar does. But, our biggest business is oil, Canada’s bread and butter. The Canadian dollar usually depends how oil prices are doing almost all the time. If oil goes up, our dollar goes up.
Before I move on to the next section, I would like to briefly talk about fracking. For those of you who don’t already know what fracking is, Fracking is drilling holes into rocks in the ground and pumping them up with fluid till they burst and release the gas inside. But along with that, some other harmful chemicals may enter earths water supply underground. Fracking has been proven very harmful to …show more content…
In 2012, the CAD was at its best in a long time valued at a 1 to 1 with the USD. Then, the US got into fracking and oil prices began dropping. Canada was also losing business because the US didn’t need to buy as much oil as they did before. In July of 2015, the Bank of Canada decided to lower the interest rate from 1% to 0.5%, a turn off for foreign investors. By the end of 2015, the CAD reaches an all time low since 2003 hitting just shy of 69 cents US. Between January and March of 2016, our dollar makes a recovery hitting around 78 cents US.
So, what’s happening now? July 12, 2017, the Bank of Canada decided raise the interest rate of our dollar to 0.75% from 0.5%. Our dollar rose 2 cents within a week. 2 cents is a lot when talking about currency. Then on September 6, the Bank decided to give our interest another .25% bump to 1%. Back to where it was over 2 years ago. Our dollar rose another 2 cents but since then, it has settled back down to 80 cents US. Oil has also gained back a lot of ground since 2015. It was at $30 a barrel at its lowest and has come back up to
Before I move on to the next section, I would like to briefly talk about fracking. For those of you who don’t already know what fracking is, Fracking is drilling holes into rocks in the ground and pumping them up with fluid till they burst and release the gas inside. But along with that, some other harmful chemicals may enter earths water supply underground. Fracking has been proven very harmful to …show more content…
In 2012, the CAD was at its best in a long time valued at a 1 to 1 with the USD. Then, the US got into fracking and oil prices began dropping. Canada was also losing business because the US didn’t need to buy as much oil as they did before. In July of 2015, the Bank of Canada decided to lower the interest rate from 1% to 0.5%, a turn off for foreign investors. By the end of 2015, the CAD reaches an all time low since 2003 hitting just shy of 69 cents US. Between January and March of 2016, our dollar makes a recovery hitting around 78 cents US.
So, what’s happening now? July 12, 2017, the Bank of Canada decided raise the interest rate of our dollar to 0.75% from 0.5%. Our dollar rose 2 cents within a week. 2 cents is a lot when talking about currency. Then on September 6, the Bank decided to give our interest another .25% bump to 1%. Back to where it was over 2 years ago. Our dollar rose another 2 cents but since then, it has settled back down to 80 cents US. Oil has also gained back a lot of ground since 2015. It was at $30 a barrel at its lowest and has come back up to