Over the last year the loonie’s decline made headlines across Canada. At the time of writing the Canadian dollar is hovering around just 72 cents US – but that doesn’t mean it’s the end of the world. It is however more important than ever to choose the right time and place to exchange your currency in order to get the best rate possible, and to avoid unnecessary fees. If you do it right, you can make the loonie go just as far as you need it to!
What is the normal exchange rate of US dollars?
There is no “normal” exchange rate. Rates fluctuate based on a wide range of factors and are constantly changing. Between 2000 and 2010, for example, the loonie ranged from an all time low of 61.98 cents US in 2002 to a high of $1.10 in 2007. However, the average over the last 25 years has been around 81.46 cents.
Will the dollar bounce back?
Most likely, but it could take some time. The loonie is closely tied to commodity prices (especially oil) which are low right now. Oil appears set to remain low for the coming year, but it could rise drastically and with it, so too could the loonie.
Why do different sources list different exchange rates?
All exchange rates are based on the mid-market rate – the rate that banks and currency exchange specialists use to buy and sell currency. When you buy currency, the closer you are to the mid-market rate, the more you are saving.
Where is the best place to buy currency?
Banks often charge well above the mid-market rate. For this reason the best place to buy currency is at a foreign exchange specialist like Continental Currency Exchange.
What strategies can I use to get the best rate possible?
First and foremost, buy your currency at a currency exchange specialist to get closest to the mid-market rate. Apart from buying from a specialist, it is really up to you and there are a number of choices that you can make.
- Buy now: if you think the loonie will lose value, your best option is to head to your preferred currency exchange specialist to buy your currency before the exchange rate drops further. Some currency exchange specialists like Continental allow you to pre-order, pre-pay or even order your currency straight to your door. Don’t wait until the last minute – buy your foreign currency before you think the price will fall further.
- Buy monthly: if you buy currency regularly every month then the price you pay will average out.
- Wait for a spike: watch the news, follow currency exchange specialists on twitter and wait for the loonie to spike. When it does, buy the currency you need.
- Buy in bulk: regardless of when you buy, you can often get a better rate if you buy in bulk. Larger volumes have better exchange rates.
If I have a US dollar account at my bank can I make payments in the US?
It is easy to forget but the US is still a separate country and the border is an international boundary. America has different regulations and laws, so to pay US bills you have to either use an American account or alternative methods like a foreign draft or cheque or money transfer.
Is the Canadian dollar weaker or is the US dollar stronger?
A bit of both. Oil and commodity prices have fallen, dragging the loonie down with them. South of the border the US economy is less reliant on commodities, and combined with healthy growth, low unemployment and rising interest rates the US dollar is strong in its own right.
What does this mean for traveling?
While the loonie may not be at its best, that doesn’t mean every other currency is strong. Keep an eye out for other struggling currencies and you can plan a trip that lets your dollar go far!
Stay informed. Stay Current.