/biz/ - Business & Finance

>>8897999
>doesn't Canada just use the U.S. Dollar
FFS THE STATE OF /BIZ/ look shit up before you post dumb shit like this, KYS you fuckin tard

>>8898021
Explain the euro then you angry little brainlet

That bulge.. My God.

Thats one puffy vulba

It gives governments a new policy instrument to correct imbalances in international trade.

EG Germany vs Greece

When it was deutchemark and drachma, the germans sold cars to the greeks, the greeks had cheap holidays bought by the germans. To get german cars, greeks buy deutchemarks with their drachma, germans buy drachma with their deutchemarks to buy holidays.
If the greeks spend more on cars than the germans spend on holidays, there is Excess supply of drachma in the FX market in the currency pair and the exchange rate drops. this makes the German cars more expensive for greeks and the holidays cheaper for germans.

essentially the free market for FX in reality compensates for the time lagged effects of labour productivity competitiveness and the immobility of capital in the short term to plug trade deficits.

In the case that you wanted as a government to manipulate that rate you can manipulate interest rates at the central bank, raise interest rates-reduced credit in the economy-reduced demand for overseas consumption from reduced consumption in general. also higher interest rates-foreign savers send money there for the higher return on deposits, all increasing demand for your currency increasing its value.

If you dont have your own currency another central bank just sets this rate for its own benefit not yours. thats why when germany and greece are in the euro, germany sets the rate it wants effectively (Inb4 eurotrash tell me that draghi sets it on a council, its the 4th reich the germans run the show and you know it)
meaning greece gets fucked.

>>8897999
Is that a dick