Timeline: The rise and fall of the Canadian loonie
September 1950: Canada allows the Canadian dollar to float against other currencies. The currency was previously tied to the price of gold under the gold standard.
May 1962: Canada brings back a fixed rate for a period, valuing the Canadian dollar at 92.5 U.S. cents, with a fluctuation band of plus or minus 1%.
May 1970: Canada returns to a floating rate, which it has used since. The currency climbs about 5 per cent to about 97 U.S. cents and moves above the U.S. dollar by 1972.
April 25, 1974: The Canadian dollar hits what was then a modern high of US$1.0443.
1980-1981: Canadian short-term interest rates rise sharply, and the Canadian dollar comes under significant downward pressure.
Reasons for the loonie’s depreciation include political concerns surrounding the Quebec referendum in May 1980, and the introduction of the National Energy Program by the federal government in October 1980 which initiate takeovers of foreign-owned firms by Canadian firms.
The dollar falls below US$0.77.
1985: The Canadian dollar continues to weaken against the U.S greenback on concerns over weakening economic and financial prospects, and falling commodity prices. The failure of two small Canadian banks, the Canadian Commercial Bank and the Northland Bank, also hurt the loonie’s recovery.
February 4, 1986: The loonie hits a record low of 69.13 U.S. cents based on significantly higher interest rates, intervention in the foreign exchange market, and the announcement of large foreign borrowings by the federal government.
The dollar stabilizes at US$0.72, and then begins an upward trend against the U.S dollar, which lasts until the beginning of the 90s.
October 19, 1987: The morning starts off with a surprise influx of selling in Asia’s stock markets. By the time the closing bell sounds on “Black Monday,” the world’s markets have lost more than $500 billion US.
The New York Stock Exchange dips almost twice as much as it did during the market crash of 1929 (which led to the Great Depression). The chaos around the world causes the Canadian dollar to drop briefly.
The Toronto Stock Exchange (TSE) falls by 17 per cent over a two-day period, but manages to recover a couple of days later.
1988-1989: The Canadian dollar continues to strengthen based on an upbeat economy led by a rebound of commodity prices, and a significant tightening of monetary policies to reduce inflationary pressures. Positive reactions on the part of investors after the signing of the Free Trade Agreement with the United States, ensures the dollar closes out the decade at US$0.86.
1990-1991: The Canadian dollar continues to climb for a year against its U.S counterpart, as well as many overseas currencies, due to widening interest rate differentials that favour Canadian instruments.
1992-1994: The steady decline of the Canadian dollar beginning in 1992 and continuing to 1994 reflects many factors in the economy, including concerns about persistent federal and provincial budgetary problems which softened commodity prices.
1995-1998: The loonie trades at close to US$0.73. Despite low inflation rates, moderate economic growth and concrete government finances, the loonie continues to weaken through to 1998.
Lowered commodity prices are also partly to blame in the currency slide.
August 27, 1998: The loonie touches a low of US$0.63 as the crisis in emerging-market economies deepens with a debt default by Russia, and growing concerns about Latin American countries.
The Bank of Canada follows with aggressive action, including a one per cent point increase in short-term interest rates and intervention in the foreign exchange market.
September 1998: The last time the Bank of Canada intervened in foreign exchange markets to affect movements in the Canadian dollar.
September 2001: The terrorist attacks in the United States on September 11, 2001 cause the loonie (as well as the greenback) to weaken significantly.
January 21, 2002: The Canadian dollar hits a record low of 61.79 U.S. cents, according to Bank of Canada data, undermined by weak resource prices and a robust U.S. dollar.
2003-2005: The loonie appreciates sharply through 2003, and peaks at US$0.85 in November 2004.
September 30, 2005: The loonie strengthens against all major currencies and reaches a high of US$0.86.
May 2006: The dollar is worth $US0.90. The US dollar weakens against most main currencies while the Canadian dollar gains on optimism about Canada’s economy.
May 31, 2007: The loonie soars at US$93.48 with news from Statistics Canada that Canadian economic growth has hit a two-year high of 3.7 per cent in the first quarter of the year.
September 20, 2007: The Canadian dollar returns to equal value with the U.S. dollar for the first time since the 1970s.
October 18, 2007: The Bank of Canada predicts that Canada’s economy will weaken in the second half of the year and in 2008 as a result of strict credit conditions and the high export-killing loonie. The Bank expects the value of the loonie to remain high.
November 7, 2007: The loonie closes at US$1.0775, intensifying fears that a rapidly climbing currency could erode the competitiveness of Canadian products. The news prompts Prime Minister Stephen Harper to issue a cautionary comment about the dollar.
“The prime minister doesn’t typically comment on the Canadian dollar, other than to say it’s clear that it has some advantages and some real significant disadvantages for certain sectors and we are concerned, we share those concerns,” Harper said.
December 1, 2007: The Canadian dollar slides to close at parity with the US dollar for the first time since 1978.
January 2008: The forecast of a U.S. recession sends the TSX composite index spiralling 605 points, the biggest one-day loss since 2001.
July 22, 2008: The Canadian dollar trades above parity with the U.S. dollar for the last time in 2008 as the global financial crisis drives commodity-linked currencies lower.
September 2008: The TSX suffers a 20 per cent drop due to the subprime mortgage crisis, and the collapse of investment giants like Lehman Bros. and Merrill Lynch.
October 2008: As the price of oil and other commodities continues to drop, the Canadian dollar nosedives. By the end of the month, the loonie buys about US$0.82, down from US$0.93 at the beginning of the month. At the same time, oil drops to just over $60 U.S. a barrel.
November 2008: The TSX hits a record low. The US finds itself hit hard by the financial fallout, and the rest of the world is deeply impacted. Stock markets are down across the globe, and banks are on the verge of failure.
The TSX experiences the biggest one-day drop on record, and recovers only slightly by the end of the day.
December 2008: The Bank of Canada cuts its overnight lending rate three-quarters of a percentage point to 1.5 per cent, the lowest since 1958, in an effort to stimulate the Canadian economy. Canada’s central bank says Canada is "now entering a recession."
May 8, 2009: Statistics Canada reports that the Canadian economy unexpectedly gained 35,900 jobs in April, and the American government also releases a report showing there were less jobs cut than expected in April. After the news is released, the Canadian loonie rises to US$0.86.
October 13, 2009: Canada’s dollar trades near the highest level in more than 14 months, approaching parity with the U.S dollar for the first time since July 2008.
One Canadian dollar buys 96.81 U.S. cents. After falling to a four-year low last year, the Canadian dollar is showing a dramatic comeback. The 10-month high comes from growing optimism about the prospects for global economic recovery.
January 11, 2010: The Canadian dollar rises to a three-month high, as strong trade data out of China lift commodities and push the U.S. dollar lower. The loonie isp to 97.07 U.S. cents in early trade.
January 20, 2010: The loonie drops to 95.35 cents U.S. as low inflation data lowers pressure for Canadian rate hikes and China moves to tighten bank lending, casting global growth prospects into doubt and sending commodities broadly lower.
March 5, 2010: The dollar advances to 97.04 cents U.S. for the sixth straight session against the U.S. greenback, and rises to its highest level in six weeks as U.S. jobs data boosted investors’ outlook for the North American economy.
March 8, 2010: The loonie overtakes the Australian dollar among commodity currencies as the safety of Canada’s banking system and ties with the U.S. economy spur investors to buy the loonie.
March 10, 2010: Canada’s unstoppable dollar posts its ninth straight winning session and closes at 97.48 U.S. cents.
March 17, 2010: The Canadian loonie continued its assault on the U.S. greenback, rising to 99.27 cents U.S., but closes at 98.98 cents U.S.
April 6, 2010: Canada’s dollar returns to equal value with the U.S. dollar for the first time in about 20 months.
April 13, 2010: The Canadian dollar finished at C$0.9992 to the U.S. dollar, or 100.08 cents U.S., according to official closing figures from the Bank of Canada.
October 14, 2010: The loonie reaches $1.0019 U.S. in the morning but later closes at 99.40 cents U.S.
October 19, 2010: The Canadian dollar falls to 96.4 cents U.S. after the Bank of Canada issued a bleak economic outlook. A strengthening U.S. dollar contributed to the fall.
November 10, 2010: Canada’s dollar ended the day at parity with the greenback, at 100 cents U.S.
December 31, 2010: The Canadian dollar ends 2010 above parity with the U.S. currency, closing at its highest level in more than two and a half years amid rising commodity prices, at 100.54 cents U.S.
January 10, 2011: The loonie holds its own against the greenback well into the new year, closing the day at 100.68 cents U.S. Canadian consumers, however, are angry that retail prices are still 15 to 30 per cent higher in Canada than the U.S. Analysts say the loonie is likely to be unchallenged anytime soon.
January 20, 2011: Douglas Porter, deputy chief economists with BMO Capital Markets, says the loonie is likely to stay above parity most of the year.
January 31, 2011: The loonie dips slightly, closing at 99.85 cents U.S. It bounced back the next day, closing at 100.92 cents U.S.
February 4, 2011: Canada’s dollar closes at its highest level in more than two years, closing at 101.17 cents U.S.