Canadian Dollar Futures

Before the Canadian Parliament established the Canadian Dollar in 1871, practically every province was conducting transactions in local currencies. Today, the Canadian Dollar value has floated ever since 1970, and is the 7th most traded currency in the world. Just as in the U.S., slang for a dollar is a “buck”, which dates back to the same term used to describe the value of a beaver pelt in the 17th century.

Canadian Dollar Contract Specifications
Contract Size	100,000 Canadian dollars
Trading Hours	CME Globex: Sundays: 5:00pm – 4:00pm CT next day. Monday – Friday: 5:00pm – 4:00pm CT the next day, except on Friday – closes at 4:00pm and reopens Sunday at 5:00pm CT.
Trading Hours	CME ClearPort: Sunday – Friday 5:00pm – 4:15pm CT with a 45–minute break each day beginning at 4:15pm
Minimum Price Fluctuation	$.0001 per Canadian dollar increments ($10.00/contract). $.00005 per Canadian dollar increments ($5.00/contract) for CAD/USD futures intra-currency spreads executed electronically.
Product Code	CME Globex: 6C
	CME ClearPort: C1
	Clearing: C1
Listed Contracts	Twenty months in the March quarterly cycle (Mar, Jun, Sep, Dec)
Settlement Method	Deliverable
Last Trade Date	9:16 a.m. Central Time (CT) on the business day immediately preceding the third Wednesday of the contract month (usually Tuesday).
Settlement Procedures	Physical Delivery – Canadian Dollar Settlement Procedures
Position Accountability	6,000 contracts
Block Trade Eligibility	Yes.
Block Minimum	100 Contracts
Exchange Rules	These contracts are listed with, and subject to, the rules and regulations of CME.
Source: CME Group

Canadian Dollar Facts

Canadian dollar futures allow traders to assess value against the U.S. dollar, as well as the opportunity to address risk from currency fluctuations in other foreign trade markets.

Currency rates are determined by a one base currency quoted in relation to a different currency. Major currencies that are traded are floating. Central bank monetary policies can affect the value of currency. The Bank of Canada regulates monetary policy for its currency. For instance, low interest rates dictated as policy can be bearish for currency value because new money is being pumped into the market. This is unappealing to foreign investors because returns yield those low interest rates. In contrast, high interest rates set as policy are bullish and appealing to foreign investors because of high interest yields from the returns. Currency values can be also be affected by the nation’s current account balance. An excess or influx in the balance is considered to be bullish, while a deficit or drainage is considered to be bearish. Economic stability and investment in the country also help strengthen currency values because international investors are likely to buy into that country’s favorable markets.

Source: Barchart

Last updated September 2015