Importance of the Canadian Dollar

The Canadian Dollar is the seventh-most traded currency on the Forex market, as many institutions and individuals trade the CAD. People also refer to the CAD as the Loonie, buck, Huard, and Piastre (in French). The Canadian Dollar is held as a reserve currency by a number of central banks. It is also known as a commodity currency, due to the country's substantial raw material exports.

Introduction of the CAD

Currency was first introduced to Canada in the early 1660s when French colonists brought coins to the area. The very first banknotes were issued in Canada in 1821 by the Montreal Bank and soon became a primary method of payment. In 1841, as a British colony, the Province of Canada began to issue a currency called the Canadian Pound; but in 1858, the Canadian Dollar replaced the Pound and aligned with the US Dollar. During this time, both US Dollars and British Gold Sovereigns were legal tender within Canada's borders. After Canadian Confederation, the government decimalized the currency and a new series of coins were issued in the Dominion of Canada. The Bank of Canada was established in 1934 with the first issue of banknotes a year later. The first Loonie coin was introduced in 1987 and the two-dollar coin (often called the Toonie) was launched in 1996. In 2011, the Central Bank of Canada issued a new series of bank notes printed on a polymer material.