The Canadian dollar is denoted by the sign $, although alternative symbols such as CA$, Can$, and C$ are also used to distinguish CAD from other dollar-denominated currencies. Canadian economic growth is looking weaker eurjpy correlation than the U.S., leading the Bank of Canada to cut its key interest rate by an unusually high half a percentage point to 3.75 per cent last week. Low and stable inflation in Canada helps maintain the purchasing power of the CAD, making it more attractive to investors. High inflation, however, erodes purchasing power and can weaken the currency. Canada’s trade balance—exports minus imports—also plays a significant role. A trade surplus, where exports exceed imports, increases demand for the Canadian dollar as foreign buyers purchase CAD to pay for Canadian goods and services.
Canadian Consumer Price Index (CPI) figures are in the barrel for Tuesday, and are expected to show another broad uptick in Canadian inflation pressures. An upside print in key inflation metrics bodes poorly for the Bank of Canada (BoC), which slashed interest rates again last week despite an expected upturn in inflation on the cards. The BoC is cutting rates in order to try and increase affordability in the runaway train that is the Canadian housing market.
Figure 1 – The Canada–U.S. Exchange Rate, U.S. Dollar per Canadian Dollar, 1951–2024
- Although rare, the BoC may intervene directly in the forex markets to influence the CAD’s value.
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- Investors also look at real interest rates—nominal interest rates adjusted for inflation.
- For those situations, holding U.S. dollars can offer more predictability for budgeting and lessen the impact of fluctuations or a further decline in the Canadian dollar, particularly for large transactions.
- The standard set of designs has Canadian symbols, usually wildlife, on the reverse, and an effigy of Charles III on the obverse.
Compare our rate and fee with our competitors and see the difference for yourself. The lower loonie should help industries like tourism because it can encourage more Americans to travel north to get more bang for their buck, but for anyone travelling to the U.S., or buying things in U.S. dollars, it means paying more. You’ll now see the value of the converted currency according to the most recent exchange rate. After the COVID-19 pandemic began in March 2020, investors’ demand for U.S. dollar-denominated assets increased significantly due to the U.S. dollar’s status as a safe haven during periods of economic uncertainty and financial market turbulence. This surge in demand for U.S. dollar-denominated assets contributed to a decline in the value of the Canadian dollar, from 75.3 cents U.S. in February 2020 to 71.1 cents in April 2020.
Top currency pairings for Canadian 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. In 1871, Prince Edward Island 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. Jonathan Earle from The Outfitters in St. John’s says new price lists delivered include higher costs for some goods – with suppliers blaming the low Canadian dollar. Gold price struggles to gain any meaningful traction on Friday as bulls now seem reluctant to place fresh bets after the recent strong move up to a record high and a modest USD uptick. However, persistent economic uncertainties amid Trump’s trade tariffs and Fed rate cut bets should continue to support the non-yielding bullion.
Conversion Rates US Dollar/Canadian Dollar
They add hidden markups to their exchange rates – charging you more without your knowledge. The biggest driver of the split between the Canadian and U.S. dollar is the diverging economic outlooks, and the interest rate decisions linked to those. That’s because the higher the central bank interest rate, the more worthwhile it is to hold that country’s currency. Our currency rankings show that the most popular Canadian Dollar exchange rate is the CAD to USD rate. The currency code for Canada Dollar is CAD, and the currency symbol is $.
U.S.-made products sold by Canadian retailers will be more expensive, too. While all of these factors may paint a collectively bleak picture, it’s important to remember that dramatic currency fluctuations—in Canada and around the world—have been common for as long as currencies have existed. Instead, seek out products designed to help you buy and hold U.S. dollars, like an EQ Bank US Dollar Account, which can reduce the impact from sudden fluctuations during economically turbulent times. If the company goes bust and you’ve paid by bank transfer, it’s unlikely you’ll get your money back.
We carry out stringent and regular checks on the companies that feature on our website, but even so we cannot guarantee their solvency. Please conduct your own due diligence before transacting with a company, and pay by card wherever possible as cards offer more financial protection than paying by bank transfer. Credit cards offer full financial protection, and your money is protected by law under Section 75 of the Consumer Credit Act. Section 75 states that your card issuer must refund you in full if you don’t receive your order. Be aware that many credit cards charge a cash advance fee (typically around 3%) for buying currency, so you may have to weigh up the benefits of full financial protection with the extra cost of using a credit card. You might hear Canadians refer to their dollar coins as ‘loonies’ and ‘toonies’.
CAD/CNH
While oil is the dominant factor, other natural resources also influence the CAD. Prices for these commodities can also have an impact, especially when global demand shifts due to economic cycles or geopolitical tensions. Since 76.7% of Canada’s exports go to the U.S., and 53.3% of imports into Canada come from the U.S.,34 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.
EUR/USD Market Overview: Consolidation Amid Mixed Data
The greater the price of the purchase, the bigger the impact fluctuations can have on the total. So, if you anticipate buying a big-ticket item, buying U.S. dollars equal to that expense at an exchange rate you find acceptable can help your future budget. With a target interest rate of almost zero and the implementation of a fiscal stimulus package, the U.S. economy gradually recovered from the 2008 financial crisis. This resulted in growing productivity and employment, and an inflow of investments to the U.S.
CAD/USD
MydayFinance () is a comprehensive foreign exchange industry website, providing global users with 24-hour comprehensive and timely foreign exchange market information, foreign exchange rate real-time query, best cryptocurrency exchange foreign exchange rate conversion and other content. For those situations, holding U.S. dollars can offer more predictability for budgeting and lessen the impact of fluctuations or a further decline in the Canadian dollar, particularly for large transactions. One way to save in U.S. dollars is through accounts like the EQ Bank US Dollar Account, which offers a compelling interest rate—one of the highest in Canada for U.S.-dollar savings.
- A lower Canadian dollar can boost industries like tourism, where the weaker dollar increases visitors from abroad, especially from the U.S., as their money goes further here.
- If Canada offers higher real interest rates than other countries, it attracts foreign capital, supporting the CAD.
- The Xe Rate Alerts will let you know when the rate you need is triggered on your selected currency pairs.
- Just remember to buy or reserve your Canadian dollars first before you collect them from the store so you benefit from the supplier’s better online rate.
The value of a country’s currency plays a pivotal role in its economy, and the Canadian dollar (CAD) is no exception. Known colloquially as the “loonie” due to the depiction of a loon on the one-dollar coin, the Canadian dollar is one of the most traded currencies globally. Understanding what determines its value requires an examination of economic fundamentals, candle readings and meanings geopolitical events, and market sentiment. This article delves deep into the key drivers behind the value of the Canadian dollar, providing clarity for investors, businesses, and foreign exchange traders alike. Elena, a seasoned foreign exchange trader with a proven track record in the dynamic world of currency markets, brings a wealth of expertise and professionalism to the financial realm. Her disciplined approach to risk management ensures prudent investment strategies, instilling confidence in both colleagues and clients alike.
For example, the CAD tends to strengthen during the summer months when demand for Canadian exports like agricultural products and energy increases. Production was maintained through 1967 with the exception of the war years between 1939 and 1945. In 1860, the colonies of New Brunswick and Nova Scotia followed the Province of Canada in adopting a decimal system based on the U.S. dollar unit. Our list features brokers with competitive spreads, fast execution, and powerful platforms. Whether you’re a beginner or an expert, find the right partner to navigate the dynamic Forex market. If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned.
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