Inside the Currency Market: Mechanics, Valuation, and Strategies

Canada

Canada revised their old C-6 and G-10 Index in 2006 to reflect the change in trade conditions that reflected trade in services as well as new trading partners. Today that index is called Canada Effective Exchange Rate Index (CERI) and reflects six nations’ currencies based on 2 percent trade or higher with Canada: U.S. dollar, euro, British pound, Japanese yen, Chinese renminbi, and the Mexican peso. The weights in the index work like this: U.S. dollar 0.7618, euro 0.0931, yen 0.0527, renminbi 0.0329, peso 0.0324, and British pound 0.0271. The United States by far holds the largest position in the index due to the enormous import and export business between the two nations.

The United States accounts for 0.7618 of the index so the Canadian ...