Like other pairs on the FOREX market, the USDCAD is strongly tied to the price of oil on the international market. The United States and Canada are two of the countries that make the most oil in the world.
Also, the United States is the biggest market for Canada's oil exports. So, if the price of oil goes up, it will hurt the US dollar and help the Canadian dollar. On the other hand, if oil prices go down, the pair tends to go up.
Canada also sends out a lot of materials and goods, like wood, grain, minerals, and other raw materials. Canada's import and export business has grown because it is so close to the US. It also keeps the currency's position on the foreign exchange market strong.
Changes in interest rates and policies to help get more people to work are also things to think about. The Central Bank of Canada and the Federal Reserve of the United States make the announcements.
Changes in interest rates and policies aimed at getting more people to work are also things to think about. The Central Bank of Canada and the Federal Reserve of the United States make these announcements. In this case, the most important thing is to pay attention to the dates when they meet, because the USDCAD pair is much more volatile on those days.
Since their economies are closely linked, data on GDP growth, industrial production (PMI index), and consumer demand for goods are very important. Because of this, it can cause big jumps in the pair's volatility.
It is possible to make money off of the bad policies of some countries. The fall of the US stock market and real estate market in 2008 is one example. Also, the fact that banks kept lending money without thinking throughout the 2000s led to a crash. But Canadian banks were not affected because they didn't have the same rules as American banks.
Based on technical analysis, different strategies can be used since it is a very liquid pair, especially during the hours with the most trades. During the opening hours of the NYSE, there are usually a lot more transactions, which makes the volume in the pair go up.
Canada and the US have different ways of running their economies. While Canada tends toward more liberal economic policies and strict immigration rules, the US depends on the economic boost that educated and talented immigrants give to the workforce.
The US dollar is used in a lot more trades than other currencies, and it is also used in almost every major global industry.
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At first glance, the US and Canada may seem to be very different. Still, their close location helps traders and makes it easy to trade USDCAD. Back testing and analyzing all of the things we've talked about will give you a better view of the market and make it more likely that you'll be successful in trading.
