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Old 05-07-2019, 09:57 AM
 
64 posts, read 20,320 times
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Hi,


Can somebody clarify my understanding of exchange rates?


I know that 1 CAD = 0.74 USD at the moment.


Does this mean that things truly are cheaper in Canada? Or do things roughly end up costing the same thing since things are priced at a higher number in Canada to make up for the difference?


I just got back from Canada last month and my friends told me to buy as much stuff as I need while I was up there but I noticed that things were priced at higher numbers. For example, a candy bar that might cost ~$1.50 in America may be like ~2.35 CAD in Canada.


Additionally, I've heard various people throughout my life say that "now is the best time to go to XYZ country since the dollar is strong!". Does this hold any merit?


Please help

Last edited by HomeHunt82; 05-07-2019 at 10:32 AM..
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Old 05-07-2019, 10:12 AM
 
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Exchange rate really do not have anything to do with how cheap a country/area is
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Old 05-15-2019, 09:15 PM
 
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When we ski in Canada with a comparatively strong USD, some things are cheaper. And why my Canadian skier friends are reluctant to ski in the USA.
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Old 05-16-2019, 07:56 AM
 
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Quote:
Originally Posted by Lowexpectations View Post
Exchange rate really do not have anything to do with how cheap a country/area is

That's a little misleading. I know what you're trying to say but the fluctuations in exchange rate can certainly affect how cheap a country is when paying with another country's currency. Americans traveling to Australia late January last year got about $1.23 in Ozzy dollars for each US dollars. If I land in Sydney today I'll get about $1.44 AUD for every Trump I exchange. Oz retail prices for goods and services don't change in concert with the USD/AUD exchange rate. Americans traveling to Australia now will find it considerably cheaper than those who visited early last year.

I'm using Ozzie dollars as an example but it works pretty much the same with other currencies.
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Old 05-16-2019, 01:43 PM
 
Location: Myrtle Creek, Oregon
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Lots of Chinese goods will be 25% cheaper if you buy them in Canada, thanks to the US-China trade war. The whole kerfuffle over NAFTA was that China was shipping goods to Canada and then to the US without regulation. That theoretically affects individuals crossing the border, but it's rarely enforced.

There are always international currency exchange fees. Visa has a pretty good deal, just adding $1 USD to each transaction. Putting things on credit cards keeps you from getting stroked twice, once when you exchange USD for CAD and then when you exchange your leftover CAD for USD.

Local prices often vary. Your best bet is to comparison shop just like you do in the US. If you are buying tools and such, remember that you have to go to the country of origin to put in a warranty claim. In the US, it's called Gray Market.
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Old 05-16-2019, 02:15 PM
 
Location: Aurora Denveralis
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It's easy to misunderstand because the currency shares a name. A US, Canadian or Australian 'dollar' is just a unit of economic exchange tied to its national economy.

If you're not surprised that there's 110 yen to a USD, or 1.5 USD to a pound, then you shouldn't be surprised when the Canadian "Looney" or the Aussie "Bunnywabbit" does not have the same value.
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Old 05-16-2019, 04:45 PM
 
18,845 posts, read 13,587,446 times
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Quote:
Originally Posted by 1insider View Post
That's a little misleading. I know what you're trying to say but the fluctuations in exchange rate can certainly affect how cheap a country is when paying with another country's currency. Americans traveling to Australia late January last year got about $1.23 in Ozzy dollars for each US dollars. If I land in Sydney today I'll get about $1.44 AUD for every Trump I exchange. Oz retail prices for goods and services don't change in concert with the USD/AUD exchange rate. Americans traveling to Australia now will find it considerably cheaper than those who visited early last year.

I'm using Ozzie dollars as an example but it works pretty much the same with other currencies.


The OP ask if the exchange rate means goods end up costing less and the truth is the exchange rate doesn’t determine that. The exchange rate could be 20.00 clovers per USD but that doesn’t mean the goods/services will be cheaper than in the US.

That was the angle for my commentary originally
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Old 05-17-2019, 08:06 AM
 
3,714 posts, read 3,116,335 times
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Quote:
Originally Posted by Lowexpectations View Post
The OP ask if the exchange rate means goods end up costing less and the truth is the exchange rate doesn’t determine that. The exchange rate could be 20.00 clovers per USD but that doesn’t mean the goods/services will be cheaper than in the US.

That was the angle for my commentary originally

I understood what you meant just wanted to point out for OP that things in Canada can be cheaper during periods when he gets more clovers per USD.
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