Canadian Dollar (CAD)
Central Bank: Bank of Canada (BoC)
Current Interest Rate: Link here

The "Loonie"
Established by the Bank of Canada Act of 1934, the Bank of Canada acts as the central bank whose aim is to "focus on the goals of low and stable inflation, a safe and secure currency, financial stability, and the efficient management of government funds and public debt." As an independent entity, Canada's central bank draws many similarities with the Swiss National Bank because it is sometimes treated as a corporation, with the Ministry of Finance directly holding shares in the bank. Despite the possibility of a conflict of interests, it is the responsibility of the governor to maintain price stability at an arm's length from the current administration, while seeking to simultaneously consider the government's concerns. With an inflationary benchmark that usually hovers between 2-3%, the BoC has been known to behave hawkishly rather than accommodative when it comes to any deviations in prices.

In line with the other major currencies, the Canadian dollar (CAD) tends to trade in similar daily ranges of 30-40 pips. However, one unique aspect of the currency is its relationship with crude oil, since Canada remains a major exporter of the commodity. For that reason, many traders and investors use this currency as either a hedge against current commodity positions or for pure speculation, tracing signals from the oil market. (Read more about the CAD's relationship with oil in Commodity Prices And Currency Movements.)



Australian/New Zealand Dollar

Related Articles
  1. Trading

    The Canadian Dollar: What Every Forex Trader Needs To Know

    Canada is becoming an increasingly viable alternative to the U.S. dollar, making it more important in the forex market.
  2. Trading

    Top 8 Most Tradable Currencies

    Currencies can provide diversification for a portfolio that's in a rut. Find out which ones you need to know.
  3. Investing

    How And Why Oil Impacts The Canadian Dollar

    The value of the Canadian dollar, or the loonie, has a strong correlation with oil prices.
  4. Investing

    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.
  5. Investing

    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.
  6. Financial Advisor

    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.
  7. Financial Advisor

    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.
  8. Financial Advisor

    Is the TSX's Sell-off a Buying Opportunity?

    Contrarian investor waiting for a commodity bounce? Why not look north for some value plays?
  9. Investing

    The Pros And Cons Of A Strong Loonie

    The fundamentals are still in place, but some analysts predict more movement against currencies other than the USD.
  10. Investing

    Toronto Stock Exchange: Safest Investment In The World?

    Canada, one of the wealthiest countries, is also one of the safest places to invest.
Frequently Asked Questions
  1. What is the difference between yield and return?

    While both terms are often used to describe the performance of an investment, yield and return are not one and the same ...
  2. What are the Differences Among a Real Estate Agent, a broker and a Realtor?

    Learn how agents, realtors, and brokers are often considered the same, but in reality, these real estate positions have different ...
  3. What is the difference between amortization and depreciation?

    Because very few assets last forever, one of the main principles of accrual accounting requires that an asset's cost be proportionally ...
  4. Which is better, a fixed or variable rate loan?

    A variable interest rate loan is a loan in which the interest rate charged on the outstanding balance varies as market interest ...
Trading Center