Investing in Currencies
Currencies are all similar in one way or another. When dealing with international trade or exchange, currencies play a large role in telling different countries what they are trading for. One type of currency would be the United States dollar and another would be the Canadian dollar (CAD). CAD, or also known as the “looner,” is basically the international currency symbol or abbreviation used to represent the Canadian dollar. One Canadian dollar is actually worth 100 cents and is frequently presented as C$ to separate it from the other currencies typically exchanged or traded in the international market.
These two are just two of the most popular international currencies traded in the market. Other commonly exchanged currencies include the Australian dollar, Swiss franc, Japanese yen, New Zealand dollar, and the Eurodollar. All these different currencies have their own individual advantages and disadvantages depending on how they are dealt. Generally speaking, when an economy has low inflation but high commodity prices, it is more likely that the national currency of an area will appreciate versus the other currencies being traded in the same economic area. There are some exceptions to this rule including the U.S. Dollar and the Eurodollar which are typically considered to be a good investment in today’s world because they are not always tied to any particular nation’s monetary policy.
For now, the only official currency that is commonly being traded internationally is the Canadian dollar since it is the only one that is backed by the full faith and credit of the government of Canada. In the past, other currencies were traded, but it was primarily the United States dollar that was traded due to the fact that the U.S. Dollar was stronger than most currencies that were being traded. However, with many changes in the global economy and the value of the U.S. Dollar against other currencies being changed, the Canadian dollar is currently the strongest global currency currently being traded.