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The Canadian dollar (
symbol A symbol is a mark, sign, or word that indicates, signifies, or is understood as representing an idea, object, or relationship. Symbols allow people to go beyond what is known or seen by creating linkages between otherwise very different conc ...
: $;
code In communications and information processing, code is a system of rules to convert information—such as a letter, word, sound, image, or gesture—into another form, sometimes shortened or secret, for communication through a communicati ...
: CAD; french: dollar canadien) is the
currency A currency, "in circulation", from la, currens, -entis, literally meaning "running" or "traversing" is a standardization of money in any form, in use or circulation as a medium of exchange, for example banknotes and coins. A more general ...
of Canada. It is abbreviated with the dollar sign $, there is no standard disambiguating form, but the abbreviation Can$ is often suggested by notable style guides for distinction from other dollar-denominated currencies. It is divided into 100 cents (¢). Owing to the image of a
common loon The common loon or great northern diver (''Gavia immer'') is a large member of the loon, or diver, family of birds. Breeding adults have a plumage that includes a broad black head and neck with a greenish, purplish, or bluish sheen, blackish ...
on its reverse, the dollar coin, and sometimes the unit of currency itself, are sometimes referred to as the ''
loonie The loonie (french: huard), formally the Canadian one-dollar coin, is a gold-coloured Canadian coin that was introduced in 1987 and is produced by the Royal Canadian Mint at its facility in Winnipeg. The most prevalent versions of the coin ...
'' by English-speaking Canadians and foreign exchange traders and analysts. Accounting for approximately 2% of all global reserves, the Canadian dollar is the fifth-most held
reserve currency A reserve currency (or anchor currency) is a foreign currency that is held in significant quantities by central banks or other monetary authorities as part of their foreign exchange reserves. The reserve currency can be used in international tr ...
in the world, behind the
U.S. dollar The United States dollar ( symbol: $; code: USD; also abbreviated US$ or U.S. Dollar, to distinguish it from other dollar-denominated currencies; referred to as the dollar, U.S. dollar, American dollar, or colloquially buck) is the official ...
, the
euro The euro ( symbol: €; code: EUR) is the official currency of 19 out of the member states of the European Union (EU). This group of states is known as the eurozone or, officially, the euro area, and includes about 340 million citizens . ...
, the yen and sterling. The Canadian dollar is popular with central banks because of Canada's relative economic soundness, the Canadian government's strong sovereign position, and the stability of the country's legal and political systems.


History

The 1850s in Canada were a decade of debate over whether to adopt a
£sd £sd (occasionally written Lsd, spoken as "pounds, shillings and pence" or pronounced ) is the popular name for the pre-decimal currencies once common throughout Europe, especially in the British Isles and hence in several countries of the ...
-based monetary system or a decimal monetary system based on the US dollar. The British North American provinces, for reasons of practicality in relation to the increasing trade with the neighbouring United States, had a desire to assimilate their currencies with the American unit, but the imperial authorities in London still preferred sterling as the sole currency throughout the
British Empire The British Empire was composed of the dominions, colonies, protectorates, mandates, and other territories ruled or administered by the United Kingdom and its predecessor states. It began with the overseas possessions and trading posts e ...
. The British North American provinces nonetheless gradually adopted currencies tied to the American dollar.


Province of Canada

In 1841, the
Province of Canada The Province of Canada (or the United Province of Canada or the United Canadas) was a British colony in North America from 1841 to 1867. Its formation reflected recommendations made by John Lambton, 1st Earl of Durham, in the Report on the ...
adopted a new system based on the
Halifax rating The Halifax rating was a valuation of the Spanish dollar in the £sd accounting system. It set the Spanish dollar at a value of 5 shillings (60 pence) and was established c.1750 in Halifax, Nova Scotia. The rating was set 6 pence higher than the a ...
. The new Canadian pound was equal to four US dollars (92.88 grains gold), making £1  sterling equal to £1.4''s''.4''d''. Canadian. Thus, the new Canadian pound was worth 16 shillings and 5.3 pence sterling. In 1851, the Parliament of the Province of Canada passed an act for the purposes of introducing a sterling-based unit in conjunction with decimal fractional coinage. The idea was that the decimal coins would correspond to exact amounts in relation to the U.S. dollar fractional coinage. In response to British concerns, in 1853, an act of the Parliament of the Province of Canada introduced the
gold standard A gold standard is a monetary system in which the standard economic unit of account is based on a fixed quantity of gold. The gold standard was the basis for the international monetary system from the 1870s to the early 1920s, and from th ...
into the colony, based on both the British gold sovereign and the American gold eagle coins. This gold standard was introduced with the gold sovereign being legal tender at £1 = US$. No coinage was provided for under the 1853 act. Sterling coinage was made legal tender and all other silver coins were demonetized. The British government in principle allowed for a decimal coinage but nevertheless held out the hope that a sterling unit would be chosen under the name of "royal". However, in 1857, the decision was made to introduce a decimal coinage into the Province of Canada in conjunction with the U.S. dollar unit. Hence, when the new decimal coins were introduced in 1858, the colony's currency became aligned with the U.S. currency, although the British gold sovereign continued to remain legal tender at the rate of £1 = Can$ right up until the 1990s. In 1859, Canadian colonial postage stamps were issued with decimal denominations for the first time. In 1861, Canadian postage stamps were issued with the denominations shown in dollars and cents.


New Brunswick and Nova Scotia

In 1860, the colonies of
New Brunswick New Brunswick (french: Nouveau-Brunswick, , locally ) is one of the thirteen provinces and territories of Canada. It is one of the three Maritime provinces and one of the four Atlantic provinces. It is the only province with both English and ...
and
Nova Scotia Nova Scotia ( ; ; ) is one of the thirteen provinces and territories of Canada. It is one of the three Maritime provinces and one of the four Atlantic provinces. Nova Scotia is Latin for "New Scotland". Most of the population are native Eng ...
followed the Province of Canada in adopting a decimal system based on the U.S. dollar unit.


Newfoundland

Newfoundland Newfoundland and Labrador (; french: Terre-Neuve-et-Labrador; frequently abbreviated as NL) is the easternmost province of Canada, in the country's Atlantic region. The province comprises the island of Newfoundland and the continental region ...
went decimal in 1865, but unlike the Province of Canada, New Brunswick, and Nova Scotia, it decided to adopt a unit based on the Spanish dollar rather than on the U.S. dollar, and there was a slight difference between these two units. The U.S. dollar was created in 1792 on the basis of the average weight of a selection of worn Spanish dollars. As such, the Spanish dollar was worth slightly more than the U.S. dollar, and likewise, the Newfoundland dollar, until 1895, was worth slightly more than the Canadian dollar.


British Columbia

The Colony of British Columbia adopted the
British Columbia dollar The dollar was the currency of British Columbia between 1865 and 1871. It replaced the British pound at a rate of 1 pound per 4.866 dollars and was equivalent to the Canadian dollar, which replaced it. The dollar was subdivided into 100 cents. No d ...
as its currency in 1865, at par with the Canadian dollar. When British Columbia joined Canada as its sixth province in 1871, the Canadian dollar replaced the British Columbia dollar.


Prince Edward Island

In 1871,
Prince Edward Island Prince Edward Island (PEI; ) is one of the thirteen provinces and territories of Canada. It is the smallest province in terms of land area and population, but the most densely populated. The island has several nicknames: "Garden of the Gulf", ...
went decimal within the U.S. dollar unit and introduced coins in the denomination of 1 cent. However, the currency of Prince Edward Island was absorbed into the Canadian system shortly afterwards, when Prince Edward Island joined the Dominion of Canada in 1873.


Confederation

In 1867, the provinces of Canada, New Brunswick, and Nova Scotia united in a federation named
Canada Canada is a country in North America. Its ten provinces and three territories extend from the Atlantic Ocean to the Pacific Ocean and northward into the Arctic Ocean, covering over , making it the world's second-largest country by to ...
and the three currencies were merged into the Canadian dollar. The Canadian Parliament passed the ''Uniform Currency Act'' in April 1871, tying up loose ends as to the currencies of the various provinces and replacing them with a common Canadian dollar.


Evolution in the 20th century

The gold standard was temporarily abandoned during the
First World War World War I (28 July 1914 11 November 1918), often abbreviated as WWI, was List of wars and anthropogenic disasters by death toll, one of the deadliest global conflicts in history. Belligerents included much of Europe, the Russian Empire, ...
and definitively abolished on April 10, 1933. At the outbreak of the
Second World War World War II or the Second World War, often abbreviated as WWII or WW2, was a world war that lasted from 1939 to 1945. It involved the vast majority of the world's countries—including all of the great powers—forming two opposi ...
, the exchange rate to the U.S. dollar was fixed at Can$1.10 = US$1.00. This was changed to parity in 1946. In 1949, sterling was devalued and Canada followed, returning to a peg of Can$1.10 = US$1.00. However, Canada allowed its dollar to float in 1950, whereupon the currency rose to a slight premium over the U.S. dollar for the next decade. But the Canadian dollar fell sharply after 1960 before it was again pegged in 1962 at Can$1.00 = US$0.925. This was sometimes pejoratively referred to as the "Diefenbuck" or the "Diefendollar", after the then Prime Minister, John Diefenbaker. This peg lasted until 1970, with the currency's value being floated since then.


Terminology

Canadian English Canadian English (CanE, CE, en-CA) encompasses the varieties of English native to Canada. According to the 2016 census, English was the first language of 19.4 million Canadians or 58.1% of the total population; the remainder spoke French ( ...
, similar to
American English American English, sometimes called United States English or U.S. English, is the set of varieties of the English language native to the United States. English is the most widely spoken language in the United States and in most circumstances ...
, used the slang term "
buck Buck may refer to: Common meanings * A colloquialism for a dollar or similar currency * An adult male in some animal species - see List of animal names * Derby shoes, nicknamed "bucks" for the common use of buckskin in their making People * Buck ...
" for a former paper dollar. The Canadian origin of this term derives from a coin struck by the
Hudson's Bay Company The Hudson's Bay Company (HBC; french: Compagnie de la Baie d'Hudson) is a Canadian retail business group. A fur trading business for much of its existence, HBC now owns and operates retail stores in Canada. The company's namesake business di ...
during the 17th century with a value equal to the pelt of a male
beaver Beavers are large, semiaquatic rodents in the genus ''Castor'' native to the temperate Northern Hemisphere. There are two extant species: the North American beaver (''Castor canadensis'') and the Eurasian beaver (''C. fiber''). Beavers a ...
 – a "buck". Because of the appearance of the
common loon The common loon or great northern diver (''Gavia immer'') is a large member of the loon, or diver, family of birds. Breeding adults have a plumage that includes a broad black head and neck with a greenish, purplish, or bluish sheen, blackish ...
on the back of the $1 coin that replaced the dollar bill in 1987, the word ''
loonie The loonie (french: huard), formally the Canadian one-dollar coin, is a gold-coloured Canadian coin that was introduced in 1987 and is produced by the Royal Canadian Mint at its facility in Winnipeg. The most prevalent versions of the coin ...
'' was adopted in Canadian parlance to distinguish the Canadian dollar coin from the dollar bill. When the two-dollar coin was introduced in 1996, the derivative word '' toonie'' ("two loonies") became the common word for it in Canadian English slang. In
French French (french: français(e), link=no) may refer to: * Something of, from, or related to France ** French language, which originated in France, and its various dialects and accents ** French people, a nation and ethnic group identified with Franc ...
, the currency is also called ;
Canadian French Canadian French (french: français canadien) is the French language as it is spoken in Canada. It includes multiple varieties, the most prominent of which is Québécois (Quebec French). Formerly ''Canadian French'' referred solely to Quebec ...
slang terms include or (the original word used in 18th-century French to translate "dollar") and (equivalent to ''loonie'', since is French for "loon," the bird appearing on the coin). The French pronunciation of (pronounced similarly to English as or , not like the word for hundred, or ) is generally used for the subdivision; is another, informal, term for 1¢. 25¢ coins in Quebec French are often called ("thirty cents") because of a series of changes in terminology, currencies, and exchange rates. After the British conquest of
Canada Canada is a country in North America. Its ten provinces and three territories extend from the Atlantic Ocean to the Pacific Ocean and northward into the Arctic Ocean, covering over , making it the world's second-largest country by to ...
in 1760, French coins gradually went out of use, and became a nickname for the halfpenny, which was similar in value to the French ''sou''. Spanish dollars and U.S. dollars were also in use, and from 1841 to 1858, the exchange rate was fixed at $4 = £1  (or 400¢ = 240''d''). This made 25¢ equal to 15''d'', or 30 halfpence (). After decimalization and the withdrawal of halfpenny coins, the nickname began to be used for the 1¢ coin, but the idiom for 25¢ endured.


Coins

Coins are produced by the
Royal Canadian Mint }) is the mint of Canada and a Crown corporation, operating under the ''Royal Canadian Mint Act''. The shares of the Mint are held in trust for the Crown in right of Canada. The Mint produces all of Canada's circulation coins, and manufacture ...
's facilities in
Winnipeg Winnipeg () is the capital and largest city of the province of Manitoba in Canada. It is centred on the confluence of the Red and Assiniboine rivers, near the longitudinal centre of North America. , Winnipeg had a city population of 749 ...
,
Manitoba Manitoba ( ) is a Provinces and territories of Canada, province of Canada at the Centre of Canada, longitudinal centre of the country. It is Canada's Population of Canada by province and territory, fifth-most populous province, with a population o ...
, and
Ottawa Ottawa (, ; Canadian French: ) is the capital city of Canada. It is located at the confluence of the Ottawa River and the Rideau River in the southern portion of the province of Ontario. Ottawa borders Gatineau, Quebec, and forms the c ...
,
Ontario Ontario ( ; ) is one of the thirteen provinces and territories of Canada.Ontario is located in the geographic eastern half of Canada, but it has historically and politically been considered to be part of Central Canada. Located in Central Ca ...
, in denominations of 5¢ (
nickel Nickel is a chemical element with symbol Ni and atomic number 28. It is a silvery-white lustrous metal with a slight golden tinge. Nickel is a hard and ductile transition metal. Pure nickel is chemically reactive but large pieces are slow t ...
), 10¢ ( dime), 25¢ ( quarter), 50¢ ( 50¢ piece) (though the 50¢ piece is no longer distributed to banks and is only available directly from the mint, therefore seeing very little circulation), $1 (
loonie The loonie (french: huard), formally the Canadian one-dollar coin, is a gold-coloured Canadian coin that was introduced in 1987 and is produced by the Royal Canadian Mint at its facility in Winnipeg. The most prevalent versions of the coin ...
), and $2 ( toonie). The last 1¢ coin ( penny) to be minted in Canada was struck on May 4, 2012, and distribution of the penny ceased on February 4, 2013. Ever since, the price for a cash transaction is rounded to the nearest five cents. The penny continues to be legal tender, although they are only accepted as payment and not given back as change. The standard set of designs has Canadian symbols, usually wildlife, on the reverse, and an effigy of
Elizabeth II Elizabeth II (Elizabeth Alexandra Mary; 21 April 1926 – 8 September 2022) was Queen of the United Kingdom and other Commonwealth realms from 6 February 1952 until her death in 2022. She was queen regnant of 32 sovereign states durin ...
on the obverse. Some pennies, nickels, and dimes remain in circulation that bear the effigy of
George VI George VI (Albert Frederick Arthur George; 14 December 1895 – 6 February 1952) was King of the United Kingdom and the Dominions of the British Commonwealth from 11 December 1936 until his death in 1952. He was also the last Emperor of I ...
. It is also common for American coins to be found among circulation due to the close proximity to the United States and the fact that the sizes of the coins are similar. Commemorative coins with differing reverses are also issued on an irregular basis, most often quarters. 50¢ coins are rarely found in circulation; they are often collected and not regularly used in day-to-day transactions in most provinces.


Coin history

In 1858, bronze 1¢ and 0.925 silver 5¢, 10¢ and 20¢ coins were issued by the Province of Canada. Except for 1¢ coins struck in 1859, no more coins were issued until 1870, when production of the 5¢ and 10¢ was resumed and silver 25¢ and 50¢ were introduced. Between 1908 and 1919, sovereigns (legal tender in Canada for $) were struck in Ottawa with a "C" mintmark. Canada produced its first gold dollar coins in 1912 in the form of $5 and $10. These coins were produced from 1912 to 1914. The obverse carries an image of
King George V George V (George Frederick Ernest Albert; 3 June 1865 – 20 January 1936) was King of the United Kingdom and the British Dominions, and Emperor of India, from 6 May 1910 until his death in 1936. Born during the reign of his grandmother Qu ...
and on the reverse is a shield with the arms of the Dominion of Canada. Gold from the Klondike River valley in the
Yukon Yukon (; ; formerly called Yukon Territory and also referred to as the Yukon) is the smallest and westernmost of Canada's three territories. It also is the second-least populated province or territory in Canada, with a population of 43,964 as ...
accounts for much of the gold in the coins. Two years into the coin's production World War I began and production of the coins stopped in favour of tighter control over Canadian gold reserves. Most of the 1914 coins produced never reached circulation at the time and some were stored for more than 75 years until being sold off in 2012. The high quality specimens were sold to the public and the visually unappealing ones were melted. In 1920, the size of the 1¢ was reduced and the silver fineness of the 5¢, 10¢, 25¢ and 50¢ coins was reduced to 0.800 silver/.200 copper. This composition was maintained for the 10¢, 25¢ and 50¢ piece through 1966, but the debasement of the 5¢ piece continued in 1922 with the silver 5¢ being entirely replaced by a larger nickel coin. In 1942, as a wartime measure, nickel was replaced by tombac in the 5¢ coin, which was changed in shape from round to
dodecagonal In geometry, a dodecagon or 12-gon is any twelve-sided polygon. Regular dodecagon A regular dodecagon is a figure with sides of the same length and internal angles of the same size. It has twelve lines of reflective symmetry and rotational sym ...
. Chromium-plated steel was used for the 5¢ in 1944 and 1945 and between 1951 and 1954, after which nickel was readopted. The 5¢ returned to a round shape in 1963. In 1935, the 0.800 silver voyageur dollar was introduced. Production was maintained through 1967 with the exception of the war years between 1939 and 1945. In 1967 both 0.800 silver/0.200 copper and, later that year, 0.500 silver/.500 copper 10¢ and 25¢ coins were issued. 1968 saw further debasement: the 0.500 fine silver dimes and quarters were completely replaced by nickel ones mid-year. All 1968 50¢ and $1 coins were reduced in size and coined only in pure nickel. Thus, 1968 marked the last year in which any circulating silver coinage was issued in Canada. In 1982, the 1¢ coin was changed to dodecagonal, and the 5¢ was further debased to a cupro-nickel alloy. In 1987 a $1 coin struck in aureate-plated nickel was introduced. A bimetallic $2 coin followed in 1996. In 1997, copper-plated zinc replaced bronze in the 1¢, and it returned to a round shape. This was followed, in 2000, by the introduction of even cheaper plated-steel 1¢, 5¢, 10¢, 25¢ and 50¢ coins, with the 1¢ plated in copper and the others plated in
cupro-nickel Cupronickel or copper-nickel (CuNi) is an alloy of copper that contains nickel and strengthening elements, such as iron and manganese. The copper content typically varies from 60 to 90 percent. (Monel is a nickel-copper alloy that contains a min ...
. In 2012, the multi-ply plated-steel technology was introduced for $1 and $2 coins as well. Also in that year mintage of the 1¢ coin ceased and its withdrawal from circulation began in 2013.


Banknotes

The first paper money issued in Canada denominated in dollars were British Army bills, issued between 1813 and 1815. Canadian dollar banknotes were later issued by the chartered banks starting in the 1830s, by several pre-
Confederation A confederation (also known as a confederacy or league) is a union of sovereign groups or states united for purposes of common action. Usually created by a treaty, confederations of states tend to be established for dealing with critical iss ...
colonial governments (most notably the Province of Canada in 1866), and after confederation, by the Canadian government starting in 1870. Some municipalities also issued notes, most notably ''depression scrip'' during the 1930s. On July 3, 1934, with only 10 chartered banks still issuing notes, the
Bank of Canada The Bank of Canada (BoC; french: Banque du Canada) is a Crown corporation and Canada's central bank. Chartered in 1934 under the ''Bank of Canada Act'', it is responsible for formulating Canada's monetary policy,OECD. OECD Economic Surveys: C ...
was founded. This new government agency became the sole issuer of all federal notes. In 1935, it issued its first series of notes in denominations of $1, $2, $5, $10, $20, $25, $50, $100, $500 and $1000. The $25 note was a commemorative issue, released to mark the Silver Jubilee of King
George V George V (George Frederick Ernest Albert; 3 June 1865 – 20 January 1936) was King of the United Kingdom and the British Dominions, and Emperor of India, from 6 May 1910 until his death in 1936. Born during the reign of his grandmother ...
. In 1944, the chartered banks were prohibited from issuing their own currency, with the Royal Bank of Canada and the Bank of Montreal among the last to issue notes. Significant design changes to the notes have occurred since 1935, with new series introduced in 1937, 1954, 1970, 1986, and 2001. In June 2011, newly designed notes printed on a
polymer A polymer (; Greek '' poly-'', "many" + '' -mer'', "part") is a substance or material consisting of very large molecules called macromolecules, composed of many repeating subunits. Due to their broad spectrum of properties, both synthetic a ...
substrate, as opposed to cotton fibre, were announced; the first of these polymer notes, the $100 bill, began circulation on November 14, 2011, the $50 bill began circulation on March 26, 2012, the $20 denomination began circulation on November 7, 2012, and the $5 and $10 denominations began circulation on November 12, 2013. Since 1935, all banknotes are printed by the Ottawa-based Canadian Bank Note Company under contract to the Bank of Canada. Previously, a second company, BA International (founded in 1866 as the British American Bank Note Company), shared printing duties. In 2011, BA International announced it would close its banknote printing business and cease printing banknotes at the end of 2012; since then, the Canadian Bank Note Company has been the sole printer of Canadian banknotes. All banknotes from series prior to the current polymer series are now considered unfit for circulation due to their lacking of any modern security features, such as a metallic stripe. Financial institutions must return the banknotes to the Bank of Canada, which will then destroy them. Individuals may keep the banknotes indefinitely.


Legal tender

As of January 1, 2021, the $1, $2, $25, $500 and $1000 notes issued by the Bank of Canada are no longer legal tender. All other current and prior Canadian dollar banknotes issued by the Bank of Canada remain as legal tender in Canada. However, commercial transactions may legally be settled in any manner agreed by the parties involved. Legal tender of Canadian coinage is governed by the ''Currency Act'', which sets out limits of: * $40 if the denomination is $2 or greater but does not exceed $10; * $25 if the denomination is $1; * $10 if the denomination is 10¢ or greater but less than $1; * $5 if the denomination is 5¢; * 25¢ if the denomination is 1¢. Retailers in Canada may refuse bank notes without breaking the law. According to legal guidelines, the method of payment has to be mutually agreed upon by the parties involved with the transactions. For example, stores may refuse $100 banknotes if they feel that would put them at risk of being counterfeit victims; however, official policy suggests that the retailers should evaluate the impact of that approach. In the case that no mutually acceptable form of payment can be found for the tender, the parties involved should seek legal advice. Canadian dollars, especially coins, are accepted by some businesses in the northernmost cities of the United States and in many Canadian snowbird enclaves, just as U.S. dollars are accepted by some Canadian businesses. In 2012,
Iceland Iceland ( is, Ísland; ) is a Nordic island country in the North Atlantic Ocean and in the Arctic Ocean. Iceland is the most sparsely populated country in Europe. Iceland's capital and largest city is Reykjavík, which (along with its ...
considered adopting the Canadian dollar as a stable alternative to the Icelandic króna. Canada was favoured due to its northern geography and similar resource-based economy, in addition to its relative economic stability. The Canadian ambassador to Iceland said that Iceland could adopt the currency; although Iceland ultimately decided not to move on with the proposal.


Value

Since 76.7% of Canada's exports go to the U.S., and 53.3% of imports into Canada come from the U.S., Canadians are interested in the value of their currency mainly against the U.S. dollar. Although domestic concerns arise when the dollar trades much lower than its U.S. counterpart, there is also concern among exporters when the dollar appreciates quickly. A rise in the value of the dollar increases the price of Canadian exports to the U.S. On the other hand, there are advantages to a rising dollar, in that it is cheaper for Canadian industries to purchase foreign material and businesses. The Bank of Canada currently has no specific target value for the Canadian dollar and has not intervened in
foreign exchange market The foreign exchange market (Forex, FX, or currency market) is a global decentralized or over-the-counter (OTC) market for the trading of currencies. This market determines foreign exchange rates for every currency. It includes all as ...
s since 1998. The Bank's official position is that market conditions should determine the worth of the Canadian dollar, although it occasionally makes minor attempts to influence its value. On world markets, the Canadian dollar historically tended to move in tandem with the U.S. dollar. An apparently rising Canadian dollar (against the U.S. dollar) was decreasing against other international currencies; however, during the rise of the Canadian dollar between 2002 and 2013, it gained value against the U.S. dollar as well as other international currencies. In recent years, dramatic fluctuations in the value of the Canadian dollar have tended to correlate with shifts in oil prices, reflecting the Canadian dollar's status as a
petrocurrency Petrocurrency (or petrodollar) is a word used with three distinct meanings, often confused: #Dollars paid to oil-producing nations (petrodollar recycling)—a term invented in the 1970s meaning trading surpluses of oil-producing nations. #Currenci ...
owing to Canada's significant oil exports. The Canadian dollar traded at a record high of in terms of American greenbacks on July 11, 1864, since the latter was inconvertible paper currency. However, the Canadian dollar remained close to par or 1:1 versus the gold or silver US dollar of the time. Unlike other currencies in the
Bretton Woods system The Bretton Woods system of monetary management established the rules for commercial and financial relations among the United States, Canada, Western European countries, Australia, and Japan after the 1944 Bretton Woods Agreement. The Bretto ...
, whose values were
fixed Fixed may refer to: * ''Fixed'' (EP), EP by Nine Inch Nails * ''Fixed'', an upcoming 2D adult animated film directed by Genndy Tartakovsky * Fixed (typeface), a collection of monospace bitmap fonts that is distributed with the X Window System * F ...
, the Canadian dollar was allowed to float from 1950 to 1962. Between 1952 and 1960, the Canadian dollar traded at a slight premium over the U.S. dollar, reaching a high of on August 20, 1957. The Canadian dollar fell considerably after 1960, and this contributed to Prime Minister John Diefenbaker's defeat in the 1963 election. The Canadian dollar returned to a fixed exchange rate regime in 1962 when its value was set at , where it remained until 1970. As an
inflation In economics, inflation is an increase in the general price level of goods and services in an economy. When the general price level rises, each unit of currency buys fewer goods and services; consequently, inflation corresponds to a reduct ...
-fighting measure, the Canadian dollar was allowed to float in 1970. Its value appreciated and it was worth more than the U.S. dollar for part of the 1970s. The high point was on April 25, 1974, when it reached . The Canadian dollar fell in value against its American counterpart during the technological boom of the 1990s that was centred in the United States, and was traded for as little as US$0.6179 on January 21, 2002, which was an all-time low. Since then, its value against all major currencies rose until 2013, due in part to high prices for commodities (especially oil) that Canada exports. The Canadian dollar's value against the U.S. dollar rose sharply in 2007 because of the continued strength of the Canadian economy and the U.S. currency's weakness on world markets. During trading on September 20, 2007, it met the U.S. dollar at parity for the first time since November 25, 1976. Inflation in the value of the Canadian dollar has been fairly low since the 1990s. In 2007 the Canadian dollar rebounded, soaring 23% in value. On September 28, 2007, the Canadian dollar closed above the U.S. dollar for the first time in 30 years, at US$1.0052. On November 7, 2007, it hit US$1.1024 during trading, a modern-day high after China announced it would diversify its trillion foreign exchange reserve away from the U.S. dollar. By November 30, however, the Canadian dollar was once again at par with the U.S. dollar, and on December 4, the dollar had retreated back to US$0.98, through a cut in interest rates made by the Bank of Canada due to concerns about exports to the U.S. Due to its soaring value and new record highs at the time, the Canadian dollar was named the Canadian Newsmaker of the Year for 2007 by the Canadian edition of ''
Time Time is the continued sequence of existence and event (philosophy), events that occurs in an apparently irreversible process, irreversible succession from the past, through the present, into the future. It is a component quantity of various me ...
'' magazine. Since the late 2000s, the Canadian dollar has been valued at levels comparable to the years before its swift rise in 2007. For most of the 2010s, the exchange rate of Canadian to US dollars was approximately US$0.70 to Can$1.00.


Reserve currency

A number of central banks (and commercial banks) keep Canadian dollars as a reserve currency. The Canadian dollar is considered to be a benchmark currency. In the economy of the Americas, the Canadian dollar plays a similar role to that of the Australian dollar (AUD) in the Asia-Pacific region. The Canadian dollar (as a regional reserve currency for banking) has been an important part of the British, French and Dutch Caribbean states' economies and finance systems since the 1950s. The Canadian dollar is held by many central banks in Central and South America as well. By observing how the Canadian dollar behaves against the U.S. dollar, foreign exchange economists can indirectly observe internal behaviours and patterns in the U.S. economy that could not be seen by direct observation. The Canadian dollar has fully evolved into a global reserve currency only since the 1970s, when it was floated against all other world currencies. Some economists have attributed the rise of importance of the Canadian dollar to the long-term effects of the Nixon Shock that effectively ended the Bretton Woods system of global finance.


Exchange rates


See also

*
Economy of Canada The economy of Canada is a highly developed mixed-market economy. It is the 8th-largest GDP by nominal and 15th-largest GDP by PPP in the world. As with other developed nations, the country's economy is dominated by the service industry wh ...
*
List of countries by leading trade partners For most economies in the world, their leading export and import trading partner in terms of value is either the European Union or China, and to a certain degree, the United States and Russia. Other countries like Brazil, India, South Africa, So ...
* List of the largest trading partners of Canada


Explanatory notes


References


Citations


Sources

* * * *


External links

*
Royal Canadian Mint



re:politics: The Canadian Dollar

Bank of CanadaExchange rate lookup

Bank of Canada — Bank notes
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