The Canadian dollar has appreciated against the U.S. dollar by an amount similar to that of the currencies of two major commodity importers, Japan and the euro area (Chart 8). Overall, the Bank estimates that about 40 per cent of the appreciation of the Canadian dollar since 2002 is due to the multilateral depreciation of the U.S. dollar.
The balance of the appreciation reflects forces other than U.S.-dollar weakness and commodity prices. In particular, a variety of attributes make Canada an attractive investment destination, including our sound public finances, resilient financial system, and credible monetary policy. These strengths limit the downside risk associated with Canadian assets, making Canada a rare safe haven in a risky world.