The USDCAD currency pair is known as “Loonie” or “Funds”, and it is one of the major currency pairs that have a wide spread due to the huge volume of trade activity between the United States and Canada. Extracted and exported from Canada to the United States.
Trading the US dollar against the Canadian dollar USDCAD
The loonie pair is one of the most traded pairs in the forex market, and the pair is affected by many external factors that move the value of each of the two currencies.
One of the most important influences on the movement of the US dollar against its Canadian counterpart is the change in interest rates determined by the Central Bank of Canada and the Federal Reserve. For example, when the Central Bank of Canada decides to intervene to support the US dollar, this will lead to a decline in the US dollar pair against the Canadian. The Federal Reserve's decision to support the US dollar will positively affect the value of the pair, which will rise.
Over the previous history, we find that the Canadian dollar is a mirror of the movements of the US dollar. If the Canadian dollar rises against the US dollar, it declines against the other major currencies and vice versa. The relationship between the Canadian dollar and its US counterpart also indicates the changes that occur in the US economy and the general state of the economy, In addition, forex traders and market analysts benefit from this relationship in both basic technical analysis.
However, the Canadian dollar has violated that rule since 2002 as it rose continuously against the US dollar and also against other major currencies.[banner-group name='bannerforex']
Fluctuations in oil prices also affect the levels of the Canadian dollar, as it is the petroleum currency in which oil is purchased, as Canada is one of the largest exporters of oil in the world.
In general, there is a negative correlation for the USD/CAD pair with the currency pairs GBP/USD, AUD/USD, NZD/USD over long periods, as the US dollar is the base currency in these pairs.
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