Whether you’re planning the trip of a lifetime or looking to wire money to family and friends, it’s a smart idea to track international exchange rates before making a money transfer. If you’re packing a bag or just wiring money, take a moment to understand the factors that influence exchange rates and keep an eye on the CAD (Canadian dollars) to COP (Colombian Pesos) conversion rate before taking any financial action.
What is an exchange rate?
A currency exchange rate is not only a determinant of a country’s economic health, but it also plays a role in how trade is conducted and how trade relationships are maintained with other countries.
A country with a high-valued currency is viewed as having a healthy, competitive economy. Countries with good economic growth tend to be able to export their goods at higher prices, and the demand for these goods causes the valuation of their currency to rise. On the other hand, if other nations were worried about a country’s economic future, they might be less likely to purchase their exports, which would in turn drive prices down and lead to a fall in that country’s currency.
Factors that affect exchange rates
There are several factors which can affect the way a nation’s currency is performing in the global market:
- Countries with lower inflation rates tend to see the value of their currency grow. For example, if inflation in Canada is relatively lower than its trade partners, then Canadian exports will be more competitive, because their prices will not have skyrocketed. At the same time, there will be more demand for Canadian dollars to buy Canadian goods, and goods from other countries may see a decrease in demand due to their inflated prices.
- Interest rates. The interest rates in a nation’s banks plays a role in how competitive its currency is. If Canadian interest rates go up, individuals from other countries may be more likely to invest their money in Canadian banks and the demand for the Canadian dollar will rise, causing its value to increase.
- Speculation is about supply and demand, but also a bit of a guessing game. If investors think that the Canadian dollar’s value will rise in the future, they may demand more now so that they’re set up to make a profit later. This increase in demand will cause the value to rise, a phenomenon very similar to gaming the stock market. Similarly, if a political event makes speculators think that a currency won’t have as much value, they may try to liquidate their assets, causing the value to drop. This happened in the UK after Brexit.
- Account deficits and public debts. The way a country spends its money and handles its debts can influence how strong their currency is viewed as. Too many outstanding debts can make other countries and investors wary of investing in that market and may drive down the value of their currency.
Whether you’re sending yourself or your money abroad, it’s a good idea to keep an eye on what’s happening in your destination. Not only will this affect your trip, but it may also affect how far your money will go.
Canadian dollars to Colombian pesos exchange rate
If you are planning to exchange your Canadian dollars to Colombian pesos, you should check the Western Union Currency Converter, which provides real time updates the value of different currencies. Currently, the exchange rate is that each Canadian dollar is worth approximately 2900 Colombian pesos.
Keep in mind that your Canadian dollars will go a lot further in Colombia due to their lower cost of living. For example, an average monthly salary in Canada is about 4000 C$, while in Colombia, an average monthly take home amount is around 450 C$, which translates to about 1,360,000 $Col. Consumer prices in Canada are nearly 140% higher than those in Colombia, which means that whether you’re sending money online to family or taking a trip of your own, your Canadian dollars will go a long way.
Keep an eye on the exchange rate so that you get the greatest value from your money being in another country and send your money through Western Union’s website. Signing up is easy, and your data is kept secure at all points throughout the encrypted transaction. Or download Western Union’s mobile app and connect with family and friends all over the world, with a click of a button.
