Conversion rates can be generally confusing to the average person. There are currently 180 currencies used around the world, but a typical individual uses only one form of currency. Unless you are a seasoned traveler or a multinational professional, you may not be too well educated on the conversion rates of even your nearest neighbors. So if you find yourself asking how much is $100 American in Canadian dollars, chances are you’re not alone.
When discovering conversion rates, understanding the dollar’s current value is a good place to start. The United States dollar is measured in three different ways.
For the purposes of exchanging American dollars to Canadian dollars, the exchange rate is what we need to focus on.
Simply put, the exchange rate is the comparing of one currency to another. By understanding the exchange rate within a country, you will be able to better estimate the value of your currency. The dollar converts to Euros differently than it does to pound sterling and the Japanese yen. Exchange rates change often, usually every day. They are as volatile as the stock market and at times can be strong or weak. It’s important to know the exact exchange rate before exchanging your currency as certain currencies convert more favorably.
Over the last twenty years, the dollar has risen and fallen. The dollar saw a decline over the first decade of the 2000s and slowly strengthened between 2011 and 2016. Certain international factors tend to cause the dollar’s fluctuation. For example, the 2008 financial crisis followed by a recession weakened the value of the dollar. In 2019, the dollar has seen some strengthening, though some have concerns that the dollar may weaken due to the trade war with China.
The exchange rate relationship between the United States dollar and the Canadian dollar can be affected by a number of ways. The exchange rate can be affected by economic forces as well as by political factors. Some of those factors include:
While these are not all of the factors that could potentially influence conversion rates from US dollars to Canadian dollars, these generally have the most influence.
When converting a larger sum of American dollars, simply multiply the number by the conversion rate.
As mentioned above, conversion rates often change daily. Before you convert your American dollars to Canadian, be sure to use one of the many conversion calculators found online for the most up to date conversion rates. You can also check our blog to learn the most volatile currency pairs.