Determinants of Demand for Currency
The determinants of demand for currency even though there is no change in the value of the currency are :
a. Changes in taste(if the foreigners start to prefer canadian goods, the demand for canadian goods will increase)
b. Changes in relative income( if foreign income increases, the demand for canadian goods will increase, ==> increase in demand for Canadian currency)
c. Changes in relative price levels (purchasing power)
d. Changes in relative interest rates( if the interest rates in Canada is higher than that of US rate,this will mean increase in the demand for Canadian currrency, because foreign investors will need canadian currency to invest in canada and if the interest rate in US falls below that of Canadian, the reverse will be the case)
e. Speculation

Dr. Stephanie Powers, Introduction to Business Macroeconomics -Exchange Rates pg. 22, Donald School of Business, Winter 2012.