Answer to Question #315599 in Macroeconomics for anu

Question

Suppose that yesterday the Canadian dollar was trading on the foreign exchange market at 0.75 euros per Canadian dollar and today the Canadian dollar is trading at 0.80 euros per Canadian dollar. Which of the two currencies (the Canadian dollar or the euro) has appreciated and which has depreciated today?

Answer 1

The Canadian Dollar has appreciated in value while the euro has depreciated in value. This means that if you have to exchange euro to a Canadian dollar, you will need to have more Euros.