Canadian Dollar (CAD)

The Canadian dollar, designated in international financial transactions and markets as C$ or CAD, is the sovereign currency of Canada.

Within its local economy, the Canadian dollar is written with just the dollar sign, $, and a two-digit decimal-based numerical value. As with other dollar-based currency systems, its smallest unit of currency is the one-cent piece, and each dollar has a value of 100 cents.

Canadian coinage includes the one-cent, five-cent, 10-cent, 25-cent, 50-cent, one-dollar, and two-dollar coins. Each contains its own metal composition and has a different size and design from others.

Canadian paper bills or bank notes contain numerous security devices, and each whole-dollar denomination from $5, $10, $20, $50, $100, $500 and $1000 use ink of different colours to easily differentiate one from another.

All though all Canadian currency is considered legal tender and is valid for payment of debts, Canadian retailers are allowed to refuse bank notes if the financial transaction is outside the denomination ratio determined by Canadian law.

The maximum denomination outlined that must be accepted per unit is

$50 if the bank notes are from $2 to $10.

$25 if the bank notes are $1.

$10 if the currency is from 10¢ or cents to $1.

$5 if the currency is 5¢.

$0.25 if the coinage is 1¢.

Retailers must accept $50 in smaller banknotes for a $9.86 transaction, but they don’t have to accept a $100 banknote.

This maximum acceptance requirement is important when considering exchanging the CAD for other currencies. Most business-to-business transactions use larger denominations when hard currency is required, but for the average citizen and visitor, this denomination acceptance outline can be vital.

When exchanged for other currency, the CAD has relative value to that currency. The relative value changes from currency pair to currency pair. For instance, against the US dollar, the Canadian dollar may hold a hypothetical CAD-to-USD ratio of 1.2:1, meaning C$1.20 purchases US$1.00.

The CAD fluctuates between sixth and seventh place in currency trading; it is the sixth-most or seventh-most traded currency in the world.

Both businesses and governments trade and hold CAD, hoping for good exchange rates in the future and as a hedge against local inflation.