What is the Loonie?
Loonie is a colloquial term for the Canadian dollar (CAD), the official currency of Canada, that originated in the forex dealer community and has subsequently gained popularity with foreign exchange (FX) traders.
Key Takeaways
- Loonie is a colloquial term for the Canadian dollar (CAD), the official currency of Canada, that originated in the forex dealer community and has subsequently gained popularity with foreign exchange (FX) traders.
- The loonie refers to the $1 Canadian coin and derives its nickname from the picture of a solitary loon on the reverse side of the coin.
- The loonie, introduced in 1987, was a replacement for the paper version of the Canadian dollar(CAD) and became such a popular nickname that the Royal Canadian Mint trademarked it in 2006.
Understanding the Loonie
The loonie refers to the $1 Canadian coin and derives its nickname from the picture of a solitary loon on the reverse side of the coin. The obverse side of the coin features a portrait of Queen Elizabeth II. The loonie became such a popular nickname for the Canadian dollar that the Royal Canadian Mint trademarked the name in 2006.
The loonie, introduced in 1987, was a replacement for the paper version of the Canadian dollar(CAD). This replacement was done both as a cost-saving measure and under pressure from vending machine operators and transit groups. Noted wildlife artist Robert-Ralph Carmichael designed the 11-sided, aureate bronze coin.
The widespread acceptance of the $1 loonie led to the introduction of the $2 coin in Sept. 1995. Although the $2 coin features a picture of a polar bear, by artist Brent Townsend, Canadians quickly began calling the coin the "toonie," a portmanteau of the words two and loonie. The Royal Canadian Mint also trademarked the term "toonie" in 2006.
The Royal Canadian Mint, located in Winnipeg, Manitoba, mints Canadian dollars. TheBank of Canada (BOC), located in Ottawa, Ontario, acts as the nation's central bank and manages thecurrency.
The Loonie in the Global Economy
The Canadian dollar is among the top-10 most widely traded currencies in the foreign exchange markets. Thanks to Canada's burgeoning exports of energy and commodities, the loonie was among the best-performing currencies against the U.S. dollar(USD) in the first decade of the new millennium.
The loonie fell sharply in value against the dollar in the wake of the 2008 financial crisis, as investors sought the safety of American assets. It has since rallied, buoyed by the rebound in the price of oil and other commodities. This increase wasmainlydue to the strength of the Chinese government's infrastructure-focused stimulus efforts, which saw increased demand for Canada's natural resources. Demand from Chinese firms for raw materials and oil, both of which Canada exports in abundance, propped up the Canadian economy and the value of the Canadian dollar.
The softening of the international oil markets beginningin 2014hurt the value of the loonie. From a peak of 1.05 CAD to 1 USD, the loonie fell to a value of fewer than 70 cents per U.S. dollar in early 2016. Since that time, the loonie has recovered somewhat as it moves in lockstep with the price of oil and other commodities.
FAQs
The loonie refers to the $1 Canadian coin and derives its nickname from the picture of a solitary loon on the reverse side of the coin.
Why is it called a loonie? ›
But why 'Loonie', you ask? Well, it's quite simple really. The coin features a lovely image of a common loon, a bird that is as quintessentially Canadian as mounties and maple syrup. The name 'Loonie' was a no-brainer and caught on faster than a wildfire in a pine forest.
How much is a loonie? ›
The loonie (French: huard), formally the Canadian one-dollar coin, is a gold-coloured Canadian coin that was introduced in 1987 and is produced by the Royal Canadian Mint at its facility in Winnipeg.
Why does the exchange rate play a particularly important role in Canada's economy? ›
Flexible exchange rates help stabilize an economy by overcoming the stickiness that is assumed to exist in nominal Page 12 4 prices and wages, thereby allowing real prices and wages to re-equilibrate.
What is another word for loonies? ›
What is another word for loony?
| demented | crazy |
|---|
| cuckoo | maniacal |
| wacky | mental |
| batty | screwy |
| wacko | loco |
210 more rowsCanadian dollar
| Dollar canadien (French) Can$, C$, CA$, CDN$, CAD |
|---|
| Nickname | Loonie, buck (in English) Huard, piastre (pronounced piasse in popular usage) (in French) |
| Denominations |
| Subunit | |
| 1⁄100 | Cent (in English) and sou (colloquial in French) |
27 more rowsLoonie & Toonie
Two classic Canadian slang words you'll need to add to your vocabulary are a loonie and toonie. A loonie is what we call our one-dollar coins which have a loon on them.
What is the word loonie? ›
Canadian informal. a dollar coin. Also: loony. Word origin. [from the image of a loon on the reverse]
What is another name for a loonie? ›
Loonie, a.k.a. Marlon Peroramas, is a Filipino rapper, emcee, songwriter and producer. He's also the lead vocalist for Stick Figgas. His other musical affiliations are with Barangay Tibay, Konektado, Ron Henley, and Artifice Records.
Is a loonie a type of currency? ›
Loonie is a colloquial term for the Canadian dollar (CAD), the official currency of Canada, that originated in the forex dealer community and has subsequently gained popularity with foreign exchange (FX) traders.
The Loonie is not an eleven-sided polygon at all, the shape is an eleven-sided curve of constant width. The technical specifications for the Loonie from the Royal Canadian Mint state that the Loonie has a diameter of 26.5 mm. A normal flat-sided polygon cannot have a constant width, but the Loonie does.
What is $2 called in Canada? ›
The 2-dollar coin, or 'Toonie', as Canadians have named it, features the image of an adult polar bear in early summer on an ice floe.
What is the strongest currency in the world? ›
1. Kuwaiti dinar. Known as the strongest currency in the world, the Kuwaiti dinar or KWD was introduced in 1960 and was initially equivalent to one pound sterling. Kuwait is a small country that is nestled between Iraq and Saudi Arabia whose wealth has been driven largely by its large global exports of oil.
Is the US dollar strong in Canada? ›
US Dollar to Canadian Dollar Exchange Rate is at a current level of 1.383, down from 1.385 the previous market day and up from 1.328 one year ago. This is a change of -0.16% from the previous market day and 4.15% from one year ago.
Is the Canadian dollar worth more than the American dollar? ›
1 CAD = 0.722473 USD Jul 29, 2024 08:31 UTC
Check the currency rates against all the world currencies here. The currency converter below is easy to use and the currency rates are updated frequently.
What is a loonie and a toonie? ›
The three smallest coins are known by the traditional names "nickel" (5¢), "dime" (10¢), and "quarter" (25¢), and the one-dollar and two-dollar coins are called the "loonie" (for the loon depiction on the reverse) and the "toonie" (a portmanteau of "two" and "loonie") respectively.
Does loony mean crazy? ›
Someone who's loony is nutty or wacky — it's a slang term for "crazy." Your loony aunt Mabel might prefer wearing a teddy bear costume when she goes to the grocery store. Loony is an informal, derogatory term for mentally ill, but it can also mean silly or outrageous.
