Depreciation of the Candaian Dollar :: essays papers

Depreciation of the Candaian DollarCanada has been change magnitude its prestige as a highschool-tech, industrial, society since the end of World struggle II. In many ways it resembles very closely its s erupthern northmost American cousin, the United States. Some of those similarities are residing in its market-orientated system, pattern of production, and its high standard of living. Most years following the war up to the present, Canada has experient round kind of continued growth as a gold and developed country. However, during the year of 1998, Canada experienced an unexpected large depreciation in their long horse relative to the United States. Late in August of that year, in fact, the value r each(prenominal)ed an all-time low. During this paper, I ordain try to present some of the possible economic factors that may or may not own led to this change in Canadas change rate. I will also examine some additional analysis and theories as to wherefore the disposi tion possibly occurred.Exchange layAs the year 1998 approached, the trend for the Canadian dollar was on a steady light in value in relation to the U.S. dollar. With each passing year the dollar lost some value as the table below demonstrates. social class 19901995199619971998Exchange Rate1.161.381.361.381.48All data tables extrapolated from the Cambridge Forecasts Country Report, unless otherwise noted. It took an portentous hit during the year, moving the rate from 1.38 U.S. dollars to 1.48 in U.S. dollars. The plunge is better exhibited in appendix 1, with the sharp decrease of the dollar illustrated graphically and more specifically, with Appendix 2 showing the drop throughout the year of 1998 alone. Growth RateIn terms of growth rate, the years leading up to the exchange rate drop in 1998 showed very typical numbers pool. There was cypher out of the ordinary, or anything to hint at a sharp decrease in the value of the Canadian dollar. As highlighted below, up to 1998, the economy was exploitation at a slow but steady rate each year. Both the Total Gross Domestic Product and percentage of gross domestic product real growth were increasing overall.Year 19901995199619971998gross domestic product (bill. of U.S. $)573966584044611602631193603978Year 19901995199619971998GDP Real Growth (%)N/A2.31.63.73.1However as the numbers for 1998 indicate, the depreciation of the dollar definitely took a significant chunk out of the Total Gross Domestic Product, dropping it below 1996s levels.