Canadian dollar: Difference between revisions
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The '''dollar''' ([[ISO 4217|currency code]] '''CAD''') has been the [[currency]] of [[Canada]] since 1858. It is normally abbreviated with the [[dollar sign]] '''$''', or '''C$''' to distinguish it from other [[dollar]]-denominated currencies.<ref>There are various common abbreviations to distinguish the Canadian dollar from others: while the [[International Organization for Standardization|ISO]] [[ISO 4217|currency code]] '''CAD''' (a three-character code without [[currency sign|monetary symbols]]) is common, no single system is universally accepted. '''C$''' is recommended by the Canadian government (e.g., per ''The Canadian Style'' guide) and is used by the [[International Monetary Fund]], while ''Editing Canadian English'' indicates '''Can$''' and '''CDN$'''; both guides note the ISO scheme/code. The abbreviation '''CA$''' is also used, e.g., in some software packages.</ref> It is divided into 100 [[cent (currency)|cent]]s. The Canadian dollar is the monetary basis for the [[Canadian economy]], with all coins minted by the [[Royal Canadian Mint]] and all banknotes printed by the [[Canadian Bank Note Company]] and BA International Inc on behalf of the [[Bank of Canada]]. |
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==History== |
==History== |
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Revision as of 19:24, 20 July 2007
| dollar canadien Template:Fr icon | |
|---|---|
| File:Loonie reverse view.png $1 | |
| ISO 4217 | |
| Code | CAD (numeric: 124) |
| Subunit | 0.01 |
| Unit | |
| Symbol | $ or C$ |
| Nickname | loonie, buck Template:En icon piastre, huard Template:Fr icon |
| Denominations | |
| Subunit | |
| 1/100 | cent Template:En icon and Template:Fr icon |
| Symbol | |
| cent Template:En icon and Template:Fr icon | ¢ |
| Nickname | |
| cent Template:En icon and Template:Fr icon | penny Template:En icon sou Template:Fr icon |
| Banknotes | |
| Freq. used | $5, $10, $20, $50, $100 |
| Rarely used | $1000 |
| Coins | |
| Freq. used | 1¢, 5¢, 10¢, 25¢, $1, $2 |
| Rarely used | 50¢ |
| Demographics | |
| User(s) | Canada |
| Issuance | |
| Central bank | Bank of Canada |
| Website | www.bankofcanada.ca |
| Printer | Canadian Bank Note Company, BA International Inc. |
| Mint | Royal Canadian Mint |
| Website | www.mint.ca |
| Valuation | |
| Inflation | 2.5% |
| Source | The World Factbook, 2006 est. |
The dollar (currency code CAD) has been the currency of Canada since 1858. It is normally abbreviated with the dollar sign $, or C$ to distinguish it from other dollar-denominated currencies.[1] It is divided into 100 cents. The Canadian dollar is the monetary basis for the Canadian economy, with all coins minted by the Royal Canadian Mint and all banknotes printed by the Canadian Bank Note Company and BA International Inc on behalf of the Bank of Canada.
History
Spanish dollar
The first dollars used in Canada were Spanish dollars; eight reales coins issued by Spain and her colonies. Because the colonies used the £sd system for accounting (see Canadian pound), it was necessary to set a valuation or rating for the Spanish dollar in £sd. Different ratings were used in the different colonies. The Halifax rating was introduced c.1750 and was the most commonly used in the northern colonies. It valued the Spanish dollar at 5 shillings (the value of the silver in the coin was equal to 4 shillings 6 pence, the "London rating").
After the American War of Independence, United Empire Loyalists, settling in Upper Canada (Ontario), brought the York rating (named after New York) of 1 Spanish dollar = 8 shillings. This was officially outlawed (in favour of the Halifax rating) in 1796 but continued to be used well into the 19th century.
During this period, many local banknotes were issued denominated in £sd, dollars, or both. The Bank of Montreal issued notes denominated in dollars in 1817, whereas the Atlantic colonies, with stronger ties to Britain and weaker ones to the United States, preferred the £sd system. Some dollar denominated banknotes bore a depiction of the Spanish dollar coin(s) they were equal to. However, few coins were issued, as the British authorities were unwilling to allow the colonies to mint their own coins. Various different bank tokens were issued in denominations of ½ and 1 penny.
In the French speaking parts of Canada (Lower Canada, formerly New France, later Quebec), the £sd and dollar system swiftly replaced the livre following the conquest by Britain. The main unit of currency was called the piastre on some French language banknotes, and some bank tokens were issued in 1 and 2 sous denominations, equal to ½ and 1 penny.
Gold dollar
In 1841, the new Province of Canada declared that its dollar was equal to the gold U.S. dollar and was worth 5 shillings. The silver Spanish dollars were rated at 5 shillings 1 penny, and the British sovereign was rated at 1 pound 4 shillings 4 pence, the proper value due to its gold content compared to that of the gold U.S. dollar.
Independent Canadian dollar
The Province of Canada declared that all accounts would be kept in dollars and cents as of January 1, 1858, and ordered the issue of the first official Canadian coins in the same year. The colonies that came together in the Canadian Confederation progressively adopted a decimal system over the next few years. When New Brunswick adopted a dollar equivalent to the Canadian dollar (see New Brunswick dollar), Nova Scotia and Newfoundland did not adopt the same dollar (see Nova Scotian dollar and Newfoundland dollar). Nova Scotia retained its own currency until 1871, but Newfoundland issued its own currency until joining the Confederation in 1949.
Finally, the Federal 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. The gold standard was temporarily abandoned during World War I, and definitively abolished on April 10, 1933.
Prior to the establishment of the Bank of Canada in 1935, Canadian banknotes were issued primarily by chartered banks, with the federal government issuing banknotes in smaller denominations never to exceed five dollars.
Reserve currency
A number of central banks keep Canadian dollars as a reserve currency. The Canadian dollar is considered to be a benchmark currency.[2]
Circulating currency
Banknotes
Canadian banknotes are currently issued in $5, $10, $20, $50, and $100 denominations. All notes are identical in size, but each denomination has a different predominant colour: $5 is blue; $10 is purple; $20 is green; $50 is red, and $100 is brown.
Since late 2006, all new notes have a full set of modern security features, including a holographic strip, watermark, and other factors. They are issued by the Bank of Canada.
Coinage
Coins are minted by the Royal Canadian Mint, and currently issued in denominations of 1¢ penny, 5¢ nickel, 10¢ dime, 25¢ quarter, 50¢ 50 cent piece (though the 50 cent piece is rarely used), $1 loonie, and $2 toonie. The standard set of faces has Canadian symbols, usually wildlife, on the reverse, and an effigy of Elizabeth II on the obverse, however some pennys, nickels, and dimes remain in circulation that have an effigy of George VI instead of Elizabeth II. Commemorative coins with differing reverses are also issued on an irregular basis. 50 cent coins are rarely found in circulation; they are often collected and not regularly used in day-to-day transactions. There have been repeated talks about getting rid of the penny as it is estimated that it costs the Royal Canadian Mint up to four cents to produce and distribute a one-cent coin.[3] The Canadian penny is rarely used and costs at least C$130 million (US$112 million) annually to keep in circulation, estimates a financial institution that called for an end to the penny.[4] A 2007 survey shows that only 37 percent of Canadians use pennies, but the government continues to produce about 816 million pennies per year, equal to 25 pennies per Canadian.[4]
Terminology
Canadian English, like American English, uses the slang term "buck" for a dollar. Because of the appearance of the common loon on back of the dollar coin which replaced the dollar bill in 1987, the word "loonie" was adopted in Canadian parlance to distinguish the Canadian dollar from other currencies, as in "The loonie performed well today on currency markets." When the two-dollar coin was introduced in 1996, the derivative word "toonie" became the common word for it in Canadian English slang.
In French, the currency is also called le dollar; Canadian French slang terms include piastre or piasse (same as "buck," but the original word used in eighteenth-century French to translate "dollar") and huard (equivalent to "loonie"), since huard is French for "loon," the bird appearing on the coin. The French pronunciation cent (pronounced cenne, not like the word for hundred) is generally used for the subdivision; sou is another, informal term.
Value
Inflation in the value of the Canadian dollar has been fairly low since the 1990s, but had been severe for some decades before that.
Since 84.2% of Canada's export goes to the United States, and 56.7% of the import into Canada comes from the U.S.,[5] Canadians are mainly interested in the value of their currency against the United States dollar (USD).
Unlike other currencies in the Bretton Woods system whose values were fixed, the Canadian dollar was allowed to float from 1950 to 1962. From 1952 to 1960, the Canadian dollar traded at a slight premium over the U.S. dollar, reaching a high of US$1.0614 on August 20 1957 (the all-time high of US$2.78 was reached on 11 July 1864 after the United States had temporarily abandoned the gold standard).
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 about US$0.925, where it remained until 1970. As an inflation-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 US$1.0443. The Canadian dollar has continued to float since then, but it has not been above the U.S. dollar since 1976.
Since setting an all-time low of US$0.6192 on January 21, 2002,[6] the Canadian dollar rallied from 2003 to 2006. It reached a local maximum of US$0.8506 on November 27, 2004,[7] and on July 18, 2007 it reached a 30-year high of US$0.9614 during trading[8].
On world markets, the Canadian dollar historically tended to move in tandem with the U.S. dollar, but less dramatically. A consequence is that at times an apparently rising Canadian dollar is often falling against most of the world's currencies, and vice-versa. However, during the relatively sharp rise of the Canadian dollar since 2002, it has "parted way" with the U.S. dollar and has gained value against it, while also rising against other major international currencies.
Although there was a great deal of domestic concern when the Canadian dollar was trading much lower than the U.S. dollar, there is also concern among exporters when the dollar appreciates quickly. The rapid rise in the value of the Canadian dollar increases the price of Canadian exports to the United States, which make up a large part of the economy. On the other hand, Canadian industry enjoys advantages from a rising dollar, primarily in that it is cheaper to purchase foreign material and businesses. It should be noted that the Bank of Canada has no specific target value for the Canadian dollar and has not intervened in FOREX markets since 1998.[9] The Bank is of the position that market conditions should determine the worth of the Canadian dollar.
| Current CAD exchange rates | |
|---|---|
| From Google Finance: | AUD CHF CNY EUR GBP HKD JPY USD |
| From Yahoo! Finance: | AUD CHF CNY EUR GBP HKD JPY USD |
| From XE.com: | AUD CHF CNY EUR GBP HKD JPY USD |
| From OANDA: | AUD CHF CNY EUR GBP HKD JPY USD |
See also
References and notes
- ^ There are various common abbreviations to distinguish the Canadian dollar from others: while the ISO currency code CAD (a three-character code without monetary symbols) is common, no single system is universally accepted. C$ is recommended by the Canadian government (e.g., per The Canadian Style guide) and is used by the International Monetary Fund, while Editing Canadian English indicates Can$ and CDN$; both guides note the ISO scheme/code. The abbreviation CA$ is also used, e.g., in some software packages.
- ^ Benchmark currencies of the world
- ^ Chande, Dinu; Fisher, Timothy. "Have a Penny? Need a Penny?" (.PDF) (in French/English). economics.ca. Retrieved 2007-02-26.
{{cite web}}: CS1 maint: multiple names: authors list (link) CS1 maint: unrecognized language (link) - ^ a b Agence France Presse (15 Feb 2007). "Financial group lobbies for 'penny-less' Canadian economy". Yahoo! Canada News. Retrieved 2007-02-26.
- ^ Central Intelligence Agency. "[[The World Factbook]] - Canada". Retrieved 2007-02-15.
{{cite web}}: URL–wikilink conflict (help) - ^ oanda.com. "Historical exchange rate of CAD to USD from [[December 21]], [[2001]] to [[February 21]], [[2002]]". Retrieved 2007-03-14.
{{cite web}}: URL–wikilink conflict (help) - ^ oanda.com. "Historical exchange rate of CAD to USD from [[October 27]], [[2004]] to [[March 14]], [[2007]]". Retrieved 2007-03-14.
{{cite web}}: URL–wikilink conflict (help) - ^ "Canada's Dollar Drops From 30-Year High as Inflation Declines". Bloomberg.com. Bloomberg L.P. Retrieved 2007-07-18.
- ^ Bank of Canada policy on dollar valuation and intervention in FOREX markets
External links
Official websites
- Exchange Rate Lookup
- A History of the Canadian dollar
- Bank of Canada — bank notes
- Royal Canadian Mint
- History of the earliest forms currency in Canada
Fan sites
- Canadian Paper Money A resource for those interested in learning about and collecting Canadian paper currency
Template:Standard numismatics external links
- Banknotes of Canada at Will's Online World Paper Money Gallery
- Maple Leaf Web: The Value of the Canadian Dollar
- Maple Leaf Web: The Fall & Rise of the Canadian Dollar
- Currency exchange calculator for the Canadian Dollar (CAD)