WCURRENCY

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Overview

The Canadian Dollar (CAD), nicknamed the "loonie" after the common loon on the $1 coin, is the official currency of Canada and the fifth most held reserve currency in the world. Canada is one of the world's largest exporters of oil, natural gas, and commodities, making the CAD strongly correlated with crude oil prices — it is widely considered a petrocurrency.

History

Before Confederation, Canada used a patchwork of British pounds, Spanish dollars, and local bank notes. The Canadian Dollar was introduced in 1858 by the Province of Canada, replacing the Canadian pound at a rate of 4 dollars per pound. After Confederation in 1867, the new Dominion of Canada adopted the dollar for the entire country.

Canada abandoned the gold standard in 1933 and fixed the CAD to the USD in 1962. Since 1970 the dollar has floated freely, and its value closely tracks commodity cycles — especially crude oil, of which Canada holds the world's third-largest proven reserves.

Bank of Canada

The Bank of Canada (BoC), founded in 1935, is responsible for monetary policy, issuing banknotes, and maintaining financial system stability. Unlike the US Federal Reserve, the BoC has a single mandate: keep inflation at the 2% midpoint of a 1–3% target band. The Governing Council meets eight times per year to set the overnight policy rate, which directly influences mortgage rates, consumer credit, and the CAD exchange rate.

Key Facts

• The CAD is nicknamed the "loonie" after the common loon bird on the $1 coin; the $2 coin is called the "toonie".
• Canada holds the world's third-largest proven oil reserves (after Venezuela and Saudi Arabia), making CAD one of the most oil-sensitive G10 currencies.
• The polymer banknotes introduced in 2013 are among the most counterfeiting-resistant in the world.
• USD/CAD is one of the most traded currency pairs globally, often called the "Funds" pair by forex traders.
• The maple leaf, iconic on Canadian banknotes, became a national symbol in the 1860s.
• Canada and the US share the world's longest undefended border — over 8,800 km — and conduct over $2 billion in bilateral trade daily.

See also: USD – United States Dollar · GBP – British Pound Sterling · Guide