CAD (Canadian Dollar)

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DEFINITION of 'CAD (Canadian Dollar)'

The currency abbreviation or currency symbol for the Canadian dollar (CAD). The Canadian dollar is made up of 100 cents and is often presented with the dollar sign as C$ to allow it to be distinguished from other currencies denominated in dollars, such as the U.S. dollar (USD). CAD is considered to be a benchmark currency, meaning that many central banks across the globe keep Canadian dollars as a reserve currency.

BREAKING DOWN 'CAD (Canadian Dollar)'

The Canadian dollar has been in use since 1858 when the Province of Canada replaced the Canadian pound with its first official Canadian coins. This dollar was pegged to the U.S. dollar at par using the gold standard system of 1 dollar equaling 23.22 grains of gold.

In 1871, the federal government passed the Uniform Currency Act, which replaced the various currencies of the provinces with the one national Canadian dollar. Over its history, the Canadian dollar has moved back and forth between being pegged to the U.S. dollar and being allowed to float freely. The Canadian dollar was first allowed to float in 1950; from 1962 - 1970 it was pegged again and has since been allowed to float.

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