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
In Canada these two words are nicknames for our currency. A Loonie is a 1 dollar coin. A Toonie is a 2 dollar coin. The loonie got the nickname from the picture of a species of water fowl called a “loon” displayed on one side of the coin.
Why is it called a 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.
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.
Will the Canadian dollar get stronger in 2024? ›
Movement is likely to remain subdued in 2024. The Canadian economy is closely linked to its neighbor to the South, and the Bank of Canada has kept interest rates nearly equal to those in the US. This has resulted in a recent period of low volatility in the USDCAD pair.
What does it mean when someone calls you loonie? ›
The Other Side of 'Loonie'
Beyond being a term of endearment for our one-dollar coin, 'loony' or 'loonie' is also a fun, informal term for someone who's acting crazy or foolish. It's derived from 'lunatic', but it's much friendlier and less severe.
What does Looney stand for? ›
/ˈluː.ni/ a person who is crazy, silly, or strange: He considered that most of the people he had to deal with were loonies of one sort or another.
What is the definition of loonie? ›
loon·ie ˈlü-nē Canada. : a coin worth one Canadian dollar.
What does a loonie look like? ›
The coin was instantly dubbed the 'loonie' after the solitary loon that graces the coin's reverse side. The nickname caught on and Canadians have been using it ever since. The loon design was created by noted wildlife artist Robert-Ralph Carmichael. The illustration has been modified only slightly over the years.
What animal is on a loonie? ›
The common name for the one-dollar coin is a loonie. It is called a loonie because the bird pictured on the coin is a loon.
Why is CAD so weak? ›
The Canadian dollar fluctuates largely based on the price of oil. When oil was worth more per barrel, our dollar was - for a time - worth more than the USD. However, since then, oil has been cheap (overproduced) and that's been a major cause in our dollar's decline.
It topped out at $1.0614 (US) on August 20, 1957. Until 2007 this was considered the modern-day peak for the Canadian dollar versus the US currency. The Canadian dollar was at $2.78 (US) in 1864 during the US Civil War, but in those days it was pegged to the gold standard, a practice the US had already abandoned.
Is it a good time to buy Canadian dollars? ›
There is no best time to buy Canadian Dollar. Currency markets are incredibly complex and therefore unpredictable. GBP / CAD rates change constantly. The best time you can buy Canadian Dollar is when it is convenient and you are happy with the service and rate.
What is the meaning of Toon Toon? ›
toon in American English
(tuːn) noun. (sometimes cap) a character in an animated cartoon.
What is a Looney Toon slang? ›
(slang, humorous) A silly or crazy person; a person whose actions are unpredictable and irrational. Some loony tune parked his car in the no parking section. Stop fooling around like a loony tune and get to work on your essay!
Why is it called Looney Toons? ›
Looney Tunes and Merrie Melodies were so named as a reference to Disney's Silly Symphonies and were initially developed to showcase tracks from Warner Bros.' extensive music library; the title of the first Looney Tunes short, Sinkin' in the Bathtub (1930), is a pun on Singin' in the Bathtub.
What does the name Looney mean? ›
Irish (Munster): shortened Anglicized form of Gaelic Ó Luanaigh 'descendant of Luanach', a personal name derived from luan 'warrior'. Compare Lane 3 and Lamb 3. Woulfe distinguishes the Munster name Ó Luanaigh from the Ulster name Ó Luinigh, whence Lunney .
