So it is an issue that faces us all, given the recent sharp depreciation of the U.S. dollar against the Canadian dollar, the euro, the pound, the Australian dollar, and others. What does this movement mean for the Bank of Canada? As with other asset prices, the Bank does not have a target level for the currency.
Its price is determined by the markets, and the floating exchange rate is an important part of our monetary policy system, as I mentioned earlier. Thus, in setting monetary policy in the context of this system, we do take into account these movements, and what they tell us about demand and inflation.