Most valuable Canadian currencies are based on a basket of 20 factors that are used to estimate their value.
A currency basket includes factors such as its relative purchasing power, the stability of its exchange rate and how the supply of the underlying currency affects its value.
Canada has been in a downward trend of rising currency values since 2008.
That trend accelerated when the central bank started cutting interest rates in December 2016.
The Bank of Canada has kept interest rates at zero since December 2018.
A basket of 25 factors is used to create the country’s most valuable currency.
A more recent analysis by economist Jason Furman concluded that the benchmark Canadian currency, the Canadian dollar, is now valued at $1,639.67, up 8.6 per cent over last year.
“I think it is clear that the current exchange rate situation is unsustainable and we will likely see a sharp decline in the value of the Canadian currency over the coming years,” Furman said in a news release.
In the absence of a policy change, I believe it is likely that the Bank will hike interest rates again in the next few months.” “
In addition, the Bank of Japan’s decision last month to end its monetary stimulus program and raise its key rate has created uncertainty in the global economy, which could potentially cause inflation to accelerate.”
In the absence of a policy change, I believe it is likely that the Bank will hike interest rates again in the next few months.
“The Canadian dollar rose against a basket weighted by other currencies on Thursday to a fresh 52-week high against the greenback at 86.16 cents US.
The Canadian currency fell against a US dollar basket of currencies on Wednesday to a two-week low of 88.96 cents US, according to Bloomberg data.
The dollar is still down 0.8 per cent against the euro since early April.