Why has the US dollar depreciated so dramatically over the past couple years vs the Canadian dollar?

I have traveled to Montreal at least 2 times a year for the past 10 years. For most of that time the exchange rate was pretty generous on our side. For instance, in the late 90's and even after 2001 for every US $100.00 you exchanged you would get back up to CD $150.00 or even $160.00. About a year ago it dropped to $125.00 and now it is $102.00. I believe it is is the cost of the war and the economy. My co-worker says it's not the economy but he has no explanation for it. The Canadian certainly has not exploded.

Answer:
One of the laws of economics is, if there are too many of anything the value goes down.
So, if we apply that law to U. S. dollars it means, too many dollars were put into circulation around the world and many countries are now trying to switch to a stronger currency.
This means selling tremendous amounts of U.S. dollars worldwide, which in turn is lowering the overall value of the U.S. dollar compared to the Canadian dollar.

You want a quick fix?

Go back on the Gold standard!
******************************...
Because of two reasons: Our interest rates have been abnormally low, which hurts demand; and our trade deficit has been rather large, which increases the supply abroad.


Currency follows supply/demand just like anything else. High supply + low demand = low relative price.

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