BIS Review 10/2005  3  how many U.S. dollars or Mexican pesos they can buy with their hard-earned Canadian dollars. But it is important for us at the Bank, and for those who follow our actions, to understand what is causing the exchange rate to move.
This is because the monetary policy implications of a currency movement depend on its cause, and on what other forces might be at work in the economy. Let's look at examples of the two types of exchange rate movement that result in a stronger Canadian dollar.