The Canadian Dollar exchange rate is getting higher
One of the most important aspects of any visit to a foreign country is understanding the currency. Because of course you’ll be spending money in Canadian currency.
The Canadian currency is denominated in dollars, in other words the Canadian dollar. There are 100 cents in one Canadian dollar.
You may hear of the currency referred to as the “loonie”, that’s because on one side of the Canadian one dollar coin there is a bird, which is the Loonie bird.
Like some other countries, for example Australia, the Canadian notes are a polymer based note rather than a paper-based note, and if you haven’t seen these before you may be a little surprised. In fact this is now becoming the norm for some countries because it is more difficult to copy.
The history of the Canadian dollar
In fact the Canadian dollar wasn’t always the currency of Canada. In fact the Canadian currency was denominated in pounds rather than dollars. Canada is a Commonwealth country, and therefore originally followed the British currency denomination.
In the mid 1800s there was some debate about whether or not Canada should adopt a monetary system based on the US dollar because, obviously, Canada is extremely close to the US and most local trade was with the US rather than the UK. And of course pounds are not based on the decimal system.
Most currency at that time was fixed by local provinces, as Canada had not federated. However after Federation there was a currency act passed in 1871 by the Canadian Parliament which replaced all of these provincial currencies with a common Canadian dollar.
Current exchange rates
As is the case with most international currencies now the Canadian dollar floats, in other words the value of the Canadian dollar changes all the time in relation to other currencies.
Of course one of the most important things for any traveller to any country is to make sure they get the best value from their own currency when they change their currency into the currency of the country of destination. In that respect the value that travellers get for their local currency has been declining over the last few years as the Canadian dollar strengthens against many currencies.
From the time of the financial crisis the US dollar and the British pound have been gradually declining in value, and for this reason the Canadian dollar, in relation to both these currencies, has been rising. One year ago the Canadian dollar was below one US dollar however parity has now been broken, and in July the Canadian dollar hit a high of almost $1.05 US.
However this trend has been slightly reversed over the last few months, and the value of the Canadian dollar has dropped slightly.
When should you buy your Canadian dollars?
It’s always a big decision about buying the currency of the country you will be visiting. Do you buy now, on the assumption that the currency will strengthen and therefore you will get less value for your money, or do you wait and buy when you arrive, hoping that the value of the Canadian dollar has weakened?
To some extent that decision is less important now than it has been in recent years because many people now take credit cards, and of course a purchase by credit card will always change at the exchange rate available at the time. However I know that many savvy travellers will also buy local currency after watching the exchange rates, and buying at the most opportune time.
Of course I can’t advise you, I don’t know where exchange rates are headed, just as no one else does. However it’s worth spending a little time deciding exactly how you will be spending your money in Canada.
Note: Not everywhere in Canada accepts credit cards, it’s always worth having some cash. For instance some shops in Banff don’t.
But if you’d like to find out how many Canadian Dollars your currency buys then you can do so here