Currency depreciation refers to a decrease in the value of a country's currency relative to other currencies on foreign exchange markets. For example, if the Canadian dollar depreciates against the euro, it takes more Canadian dollars to purchase one euro. This makes a country's exports less expensive and more competitive internationally, while making imports from other countries more expensive. Currency appreciation is the opposite - an increase in the value of a country's currency. Appreciation of the Canadian dollar would mean it takes fewer Canadian dollars to purchase one euro, making imports less expensive and exports less competitive. A currency can appreciate due to increased demand from high exports, interest rate hikes, or economic growth increasing demand for that country's goods and services.