TORONTO – The Canadian dollar bobbed above and below the 77 cent US mark on Friday. The loonie has been falling steadily since the Bank of Canada announced it was cutting its key rate earlier this week, and is now at its lowest level since March 2009, in the midst of the recession. Five things to know about the value of the Canadian dollar historically:
The dollar’s rise since 2000: Since 2002, the dollar steadily gained value against the U.S. dollar as well as other international currencies. Lately, it’s been fuelled by the price in oil, which is why it’s now considered a petro-currency. When oil prices began plummeting last year, so did the value of the loonie.
Highest level ever: While Canada’s currency soared to US$2.78 three years before Confederation when the U.S. temporarily abandoned the gold standard, its highest post-Confederation level was on Nov. 7, 2007, when it reached a high of US$1.0614.
The dollar’s long slide in the 1990s: During the tech boom of the ’90s that was centred primarily in the U.S., the Canadian dollar steadily slumped in value against the U.S. dollar throughout the decade and beyond. On Jan. 21, 2002, it traded for as little as US$0.6179 before high oil prices began to buoy it.
Fame and fortune: In 2007, the Canadian dollar surged, soaring 23 per cent in value throughout the year. On Sept. 28, 2007, it closed above the American buck for the first time in 30 years. Due to its soaring value and record highs, the Canadian dollar was named the Canadian Newsmaker of the Year for 2007 by the Canadian edition of Time magazine.
Petrocurrency? In the 1980s and ’90s, energy’s share in trade hovered around the five per cent mark. But by 2014, energy’s share had nearly tripled to about 15 per cent. “As long as oil exports remain a strong component of Canada’s exports, oil prices will influence the value of the Canadian dollar. If the share of oil and gas exports increases further, the link between oil prices and the exchange rate may become even stronger,” said Werner Antweiler of the Sauder School of Business at the University of British Columbia this spring.
(Source: The Bank of Canada, CP archival material)