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Document Type

Article

Abstract

This paper explores the U.S and Canada Dollar monthly exchange rates from 1/1/1986 to 9/1/2019. The model shows that the U.S Dollar and Canada Dollar monthly exchange rate at time can be estimated using the Canada three month interest rate, U.S inflation rate, the price of oil, and U.S net exports. Ferraro, Rogoff, and Rossi (2011) explore the idea of forecasting exchange rates between Canada solely based on oil prices. Batten and Thornton (1985 p.22-23) discuss theory on inflation and interest rates determining currency exchanges. This paper will show that including all of these variables can be helpful in explaining the U.S and Canada Dollar exchange rate.

Volume

2

Issue

1

Included in

Economics Commons

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