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Exchange Rates Differences when converting from US or Canadian currency

Exchange Rates

Introduction

When converting one currency to another there are two ways to write the exchange rate (i.e. the conversion formula): from the domestic currency to the foreign currency or the foreign currency to the domestic currency. 

There are two major differences between these two exchange rates.

The first difference is that the exchange rate:  converts 1 CAD to X USD whereas the other exchange rate:  converts 1 USD to Y CAD; note: CAD=Canadian Dollar, USD=US Dollar.  These exchange rates are inverses of each other which means that  and .  We will discuss these conversions and fractions in greater detail with examples.

The second major difference is whether or not the US or Canadian currency appreciates or depreciates from a change in the exchange rate. 

A rise in the one exchange rate will have the exact opposite interpretation of the strength of each currency as a rise in the other exchange rate (i.e. the inverse exchange rate).  It is crucial to identify which exchange rate the article, chart or graph you are examining is using so you can determine how changes in that particular exchange rate affects the strength of the two currencies. 

Moreover, by identifying which exchange rate of the two your are examining you will be able to accurately interpret whether or not you are converting CAD to USD or USD to CAD.

Or were you looking for the gasoline conversion page or were you looking for how to calculate your gasoline mileage?

Read the next page about The Two Exchange Rates

Now that you have performed all the calculations, see a graphical representation of gasoline prices across the USA Here

Read a very detailed analysis of exchange rates and the differences when converting from one currency to another

Rates in above table from Bank of Canada website

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