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Weekly News LEVEL 1 www.classroomready.com The Canadian Dollar travelling to London, England, you would exchange Canadian dollars for British pounds. Suppose you were standing in line at a McDonald’s in London and you were wondering if 5.25 pounds for a Big Mac was expensive. It doesn’t sound too bad, until you multiply 5.25 by the 1.71 exchange rate. That Big Mac is going to cost you $8.97 in Canadian dollars. C anada’s currency is the Canadian dollar. It is what we use to buy and sell goods and services within Canada. Different countries use different currencies. The United States uses the American dollar and the United Kingdom uses the pound. Different currencies have different values when compared to one another. For example, one Canadian dollar is equal to 0.59 British pounds, or one British pound is equal to 1.71 Canadian dollars. The value of one currency compared to another is called its exchange rate. The most common way exchange rates affect you is when travelling. If you were Exchange rates can go up or down for different reasons. If a country has a strong economy, its currency becomes stronger and its exchange rates go down. Currencies can also go up or down depending on economic and political news. For example, news that the price of oil is going up is often good for the Canadian dollar, because Canada exports a lot of oil. The Canadian dollar is often compared to the U.S. dollar. Currently, the Canadian dollar WORD POWER Currency: The money in common use in a country. © 2016 Classroom Ready. All rights reserved. Free trade agreement: An agreement among two or more countries to lower or eliminate taxes on goods or services coming from the other countries who are part of the agreement. Week 12 • 2016/17 is worth 0.74 U.S. dollars. In 2012, the Canadian dollar was actually worth more than the U.S. dollar, but it has fallen since then because of low oil prices and a slow economy in Canada. After the recent election in the United States, the Canadian dollar fell from 75 cents to under 74 cents. If Donald Trump follows through on his promises to get rid of several free trade agreements, it might make it harder for Canadian businesses to sell products and services into the United States, which would harm the Canadian economy. DID YOU KNOW? A single Canadian dollar is also called a “loonie,” because it comes as a gold-coloured coin with an image of a bird called a loon on the front. LEVEL 1 CLASSROOM READY WEEKLY NEWS • week 12 • 2016/17 The Canadian Dollar Weekly News Q & A 1. What is Canada’s currency? 2. What are some currencies from other countries? 3. What is an exchange rate? 4. Give an example of how exchange rates can affect you when travelling. 5. What can cause an exchange rate to go up or down? Critical Thinking 1. What are some things that could impact the value of a currency? www.classroomready.com 2 LEVEL 1 CLASSROOM READY WEEKLY NEWS • week 12 • 2016/17 Exchange Rates Below is a table with the exchange rates between the Canadian dollar and some other world currencies. Use this information to answer the questions that follow. CURRENCY VALUE OF CANADIAN DOLLAR IN VALUE OF FOREIGN CURRENCY FOREIGN CURRENCY IN CANADIAN DOLLARS U.S. dollar UK pound sterling European euro Australian dollar Brazilian real Chinese renminbi Hong Kong dollar Indian rupee Israeli new shekel Japanese yen Mexican peso New Zealand dollar Russian ruble Swiss franc 0.74 0.60 0.70 1.00 2.54 5.12 5.78 50.58 2.88 81.63 15.04 1.05 48.01 0.75 1.34 1.67 1.43 1.00 0.39 0.20 0.17 0.02 0.35 0.01 0.07 0.95 0.02 1.34 Bank of Canada exchange rates as at November 17, 2016 For each purchase below, calculate what the cost would be in Canadian dollars. Use the rates listed under the “Value of foreign currency in Canadian dollars” column in the table above to do the calculations. Item Cost Foreign currency 1. T-shirt 24.95 European euros 2. Postcard 32.50 Indian rupees 3. Coffee 247.50 Russian rubles 4. Lunch 96.18 Hong Kong dollars 5. Sunglasses 25.40 Mexican pesos 6. Scarf 23.64 Swiss francs 7. Umbrella 8. Hat www.classroomready.com 7.80 16.85 Cost in Canadian dollars UK pounds Australian dollars 3 LEVEL 1 CLASSROOM READY WEEKLY NEWS • week 12 • 2016/17 Word Power Using the words defined below, fill in the blank in each of the following sentences with the word that fits best. All of the words have been used in the article. 1.Emily her team from last year to her team from this year. 2.Harman had to his shirt for a larger size. 3. After buying her first house, Lisa wanted to know the market of it. 4. Jonathan’s absence would the outcome of the election. 5. The small company was concerned about the downturn. Affect: To bring about a change in; to have an effect on. Compared: Examined certain things in order to find out how alike or different they are. Currency: The money in common use in a country. Depending: Being controlled or decided by. Economic: Having to do with the managing of money in a home, business, or government. Exchange: To give in return for something else; trade. Value: The worth of a thing in money or in other goods. Wondering: Having doubt and curiosity about; wanting to know. Quiz 1. The United States uses the American dollar and the United Kingdom uses the euro. TrueFalse 2. If a country has a strong economy, its currency becomes stronger and its exchange rates go down. TrueFalse 3. The value of one currency compared to another is called its . 4. The Canadian dollar is often compared to the . 5. A single Canadian dollar is also called a “.” www.classroomready.com 4 LEVEL 1 CLASSROOM READY WEEKLY NEWS • week 12 • 2016/17 Weekly News Answer Key The Canadian Dollar 1. What is Canada’s currency? Canada’s currency is the Canadian dollar. 2. What are some currencies from other countries? The United States uses the American dollar and the United Kingdom uses the pound. 3. What is an exchange rate? Different currencies have different values when compared to one another. The value of one currency compared to another is called its exchange rate. 4.Give an example of how exchange rates can affect you when travelling. Suppose you were standing in line at a McDonald’s in London and you were wondering if 5.25 pounds for a Big Mac was expensive. It doesn’t sound too bad, until you multiply 5.25 by the 1.71 exchange rate. That Big Mac is going to cost you $8.97 in Canadian dollars. 5. What can cause an exchange rate to go up or down? If a country has a strong economy, its currency becomes stronger and its exchange rates go down. Currencies can also go up or down depending on economic and political news. For example, news that the price of oil is going up is often good for the Canadian dollar, because Canada exports a lot of oil. 6.31.68 7.13.03 8.16.85 Word Power 1.compared 2.exchange 3.value 4.affect 5.economic Quiz 1. The United States uses the American dollar and the United Kingdom uses the euro. False – The United Kingdom uses the pound. 2. If a country has a strong economy, its currency becomes stronger and its exchange rates go down. True 3. The value of one currency compared to another is called its EXCHANGE RATE. 4. The Canadian dollar is often compared to the U.S. DOLLAR. 5. A single Canadian dollar is also called a “LOONIE.” Exchange Rates 1.35.68 2.0.65 3.4.95 4.16.35 5.1.79 www.classroomready.com 5