The idea that Iceland would give up its currency and adopt the Canadian Dollar seemed extraordinary even a week ago. This author of this blog says he’s known for a while … strange he didn’t blog about it before: he is a Canadian FX analyst. However, he does explain the rationale well.
I have to ask why any country would completely replace its currency rather than just pegging it to another one given the euro experience. Greece replacing its currency with the euro seemed a good idea at the time, too. Iceland/Canada may make sure they do not repeat the mistakes of Greece and euro, but history doesn’t repeat – it rhymes.