Noon Rate

DEFINITION of 'Noon Rate'

A term used by the Bank of Canada to describe the foreign exchange rate between the U.S. dollar and the Canadian dollar. The rate is released by 12:45pm EST by the Bank of Canada on any given day, and is based on the trading that takes place from 11:59am to 12:01pm on that day.

The noon rate is often used by companies as a benchmark for translating financial statements.

BREAKING DOWN 'Noon Rate'

For example, if a Canadian company has operations in the U.S., it can use the noon rate as the benchmark exchange rate for translation purposes.

When accountants consolidate a company's financial statements, they will need to convert the U.S. dollars from U.S. operations into Canadian dollars which, in this particular example, will be done by using the noon rate quoted on the balance sheet date.

Some companies believe that the noon rate is a better measure of currency translation, because all of the trades they make in the FX market take place during the business day, and not at the end of the day.

RELATED TERMS
  1. Noon Average Rate Contract - NARC

    A type of currency forward contract that refers to the Bank of ...
  2. Big Six Banks

    A term used in Canada to describe the National Bank of Canada, ...
  3. Bank Of Canada - BOC

    The central bank of Canada, that came into existence after the ...
  4. CAD (Canadian Dollar)

    The currency abbreviation or currency symbol for the Canadian ...
  5. Current Rate Method

    A method of foreign currency translation where most items in ...
  6. Monetary Conditions Index - MCI

    A measure of monetary conditions in the Canadian economy, giving ...
Related Articles
  1. Economics

    Canadian Dollar Continues To Drop, But Why?

    The Canadian dollar-US dollar exchange rate is positively related to oil prices partly due to crude oil's big share of Canada's total FX currency earnings.
  2. Forex Fundamentals

    How To Calculate An Exchange Rate

    An exchange rate is how much it costs to exchange one currency for another.
  3. Stock Analysis

    Is Now the Right Time to Buy Canadian Stocks?

    Learn about the Canadian stock market and why it has declined over the past five years. Understand if now is a good time to invest in Canadian stocks.
  4. Investing News

    3 Reasons Canada's Economy Matters in 2016

    Discover why Canada's 2015 recession matters and why the United States is particularly dependent on a healthy Canadian economy.
  5. Stock Analysis

    Looking for Good Investments in Canada? Try These Stocks (BAM, CTC.A)

    Discover why investing in Canadian stocks makes sense and which Canadian companies to invest in even with oil prices at multi-year lows.
  6. Personal Finance

    The Canadian Economy, At A Glance

    The 12 economic indicators described here together provide a comprehensive picture of the state of the Canadian economy.
  7. Economics

    How And Why Oil Impacts The Canadian Dollar

    The value of the Canadian dollar, or the loonie, has a strong correlation with oil prices.
  8. Forex Education

    What is an Indirect Quote?

    An indirect quote expresses the amount of foreign currency required to buy or sell one unit of the domestic currency in the foreign exchange markets.
  9. Forex Fundamentals

    What Do Weak Dollar And Strong Dollar Mean?

    A weak dollar and a strong dollar describe the strength of the U.S. dollar in comparison to other currencies in the foreign exchange market.
  10. Mutual Funds & ETFs

    The Top 3 ETFs For Investing in Canada

    Learn specific information about three of the most popular and best performing ETFs that offer exposure to Canadian equity markets for U.S. investors.
RELATED FAQS
  1. How does investing in the banking sector differ between the U.S. and Canada?

    Discover why some investors prefer Canadian to U.S. banks. Learn how trades of Canadian bank shares are executed in both ... Read Answer >>
  2. How can I get 100k in a Canadian bank to a U.S. Investment firm with minimal loss ...

  3. What are the most common market indicators to follow the Canadian stock market & ...

    Learn key indicators used by analysts to follow the Canadian stock market and to gauge the condition of the overall Canadian ... Read Answer >>
  4. How does the landscape of the financial services sector in the U.S. compare to Canada?

    Read about the financial services sector in the United States and Canada, two countries that represent each other's largest ... Read Answer >>
  5. Why did Target's (TGT) expansion into Canada fail so quickly?

    Read about the four major reasons Target's expansion into Canada ended so abruptly and quickly after expanding into northern ... Read Answer >>
  6. What do the terms weak dollar and strong dollar mean?

    The two terms, weak dollar and strong dollar, are generalizations used in the foreign exchange market to describe the relative ... Read Answer >>
Hot Definitions
  1. Reverse Mortgage

    A type of mortgage in which a homeowner can borrow money against the value of his or her home. No repayment of the mortgage ...
  2. Labor Market

    The labor market refers to the supply and demand for labor, in which employees provide the supply and employers the demand. ...
  3. Demand Curve

    The demand curve is a graphical representation of the relationship between the price of a good or service and the quantity ...
  4. Goldilocks Economy

    An economy that is not so hot that it causes inflation, and not so cold that it causes a recession. This term is used to ...
  5. White Squire

    Very similar to a "white knight", but instead of purchasing a majority interest, the squire purchases a lesser interest in ...
  6. MACD Technical Indicator

    Moving Average Convergence Divergence (or MACD) is a trend-following momentum indicator that shows the relationship between ...
Trading Center