Apart from Oil, Canada’s largest exports are vehicles, consumer goods, and mineral products. In terms of production, it’s a much bigger producer and exporter, which means more exports than Canada. To do this, they’ll have to buy US dollars which means more demand for the currency, further strengthening its value.Įven without government-issued bonds, the United States has a stronger economy than Canada. The US government-issued bonds also generate much higher yields than Canada’s, which means more people are willing to invest in these bonds. The US dollars started its upward trend in 2015 due to the economy. The United States economy plays a major role in the strength of its currency. With more people, including Canadians, trading their local currency against the US dollar, the value of American money against that of Canada continues to increase. This is because it’s the currency of international trade. There’s more demand for US dollars than almost any other currency in the world today. One of the major factors determining any currency’s value is market forces, i.e., demand and supply. With more supply than demand for oil, oil-exporting countries such as Canada suffer the consequences as the value of their currency decreases since less foreign exchange enters the country.įurthermore, since America is one of Canada’s largest oil importers, the low oil prices affect the USD/CAD exchange rates. Since oil prices started falling in 2016, the value of Canada’s money has also been reducing. The plunging price of oil is a major factor behind the low value of Canadian dollars. This is basically due to few reasons, which are. However, for the past few years, it has been worth less than that of the US. ![]() The comparable value of Canadian dollars to US dollars isn’t constant, but it’s stable. ![]() Why is Canadian Money Less Valuable Than the US Money? Can You Spend American money in Canada?.Why is Canadian Money Less Valuable Than the US Money?.
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