Live USD/CAD Chart
USD/CAD is classified as one of the majors. The pair is unique among the majors, as the Canadian economy relies on the health of the US economy.
The USD/CAD pair is commonly referred to as Loonie. The name is also used to refer to a Canadian coin valued at one dollar and stems from the fact that there is a loon (bird) on the back of the coin. Other nicknames include the funds and beaver.
USD/CAD is considered a commodity currency because of the size of the country’s commodity exports. The loonie carries a strong correlation with commodities, and specifically oil. The inverse correlation between the pair and oil prices is so strong that it is often difficult to distinguish between the two charts. Canada is considered the largest single source of oil imports into the United States, accounting for 43% of crude oil imports into the US in 2015.
What Factors Affect USD/CAD ?
While the regular factors such as interest rate differentials, and economic releases affect the exchange rate, USD/CAD tends to move more on fluctuations in oil prices. The reason behind this is because there is actually a loose correlation between the US and the Canadian economy, with the largest differentiating factor being oil prices due to a large amount of oil Canada exports to the United States.
All of the majors have central banks behind them, and for Canada, the Bank of Canada decides on policies and interest rates. More information on the bank can be found at http://www.bankofcanada.ca/, while more information about the US central bank, the Federal Reserve, can be found at https://www.federalreserve.gov/.
When Does USD/CAD Experience Volatility?
The currency pair encounters volatility during the North American session as economic releases affecting both currencies are released. As the pair tends to fluctuate based on oil prices, there is often movement seen during the European session as trades are made in the commodity in the pre-market.