Canadian dollar

The Canadian dollar, CAD or C$, is the unit of currency of Canada. One hundred cents (¢) add up to one dollar.

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.

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Since about 85 per cent of Canada's external trade is with the United States, Canadians are mainly interested in the value of their currency against the United States dollar (USD). The Canadian dollar was more valuable than the USD for part of the 1970s, but has never regained that status. Since flirting with depths as low as US$0.62 (January 18, 2002), the dollar rallied through 2003, 2004 and 2005 reaching US$0.85 on November 26, 2004 and US$0.86 on September 30, 2005.

Related Topics:
United States dollar - USD - January 18 - 2002 - 2003 - 2004 - 2005 - November 26 - September 30

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On world markets, the Canadian dollar tended historically to move in the same direction as 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 mentioned above, it has "parted way" with the U.S. dollar and has basically maintained its value against other leading currencies.

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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.

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