We use the history of the variations of the dollar and the relationships between the factors that cause them.
As I mentioned, after the Asian crisis, when commodity prices dropped, the dollar dropped. More recently, with a very strong global economy and the increase in commodity prices, the value of the dollar increased.
The dollar reflects all the components of the Canadian and American economies. Its value is relative. We must determine which factors cause the movements of the dollar and our monetary policy response will depend on what those reasons are.