An increase in U.S. interest rates, holding Canadian interest rates unchanged, will cause the U.S. dollar to appreciate against the Canadian dollar.

Question

Quizplus · Accepted Answer

When U.S. interest rates increase while Canadian interest rates stay the same, it makes investing in the U.S. more attractive, leading to an increase in demand for the U.S. dollar relative to the Canadian dollar, causing it to appreciate.

An Increase in U