|Member Sentiment Bullish|
Live and Historical USD/CAD Rates
This chart represents the value of the United States (USD) dollar against the Canadian dollar (CAD) - that is how many CAD will purchase one USD. USD is a major currency, but CAD is not. USD/CAD forms a commodity pair but not a major pair. The USD/CAD pairing has been nicknamed "Loonie and the Funds."
The U.S. Dollar
The US dollar is the most common currency in the world. Commodities like gold and oil are traded exclusively in USD. It is a very popular reserve currency. USD is held in reserve at almost twice the amount as its closest competitor-the euro. In fact, more USD is held outside of the US than within it. The United States started the international trend toward floating currencies in the early 1970's, but that is not to say USD is unregulated. The Federal Reserve Board is the controlling body of USD. The Fed quite proactively control the dollar's value through adjusting the lending interest rate.
The Canadian Dollar
CAD is closely tied to USD in value and strength because Canada is so closely tied to the United States in trade. Nearly 85 % of all Canadian exports are destined for the United States, and over 50% of all Canadian imports are from the United States. Canada's exports include large holdings in oil and lumber. The largest factor in the value of the Canadian dollar, however, continues to be oil. CAD has floated since 1970, and the Bank of Canada has had no major interference in value or interest rates since 1988. Canada has the tenth largest economy in the world.
The USD/CAD pair has a close correlation because of the amount of trade the two nations carry out. Politically, this relationship has been stable for so long, that politics hardly ever have an impact, except as the US opens trade agreements with other nations. However, since most of this trade is commodity related, oil prices provide the biggest opportunity for profit on the pair. Another profit window occurs whenever the Fed announces an interest rate change. Generally, the pair has not been useful for carry trades, though occasionally depreciation in the dollar can make this possible.
August 31, 2010 at 10:20 AM • Comment
Gold and the dollar were, up while currencies like the Euro depreciated against others on concern that the Fed's actions will not be enough to support growth. Income and spending numbers released early in the day showed that...Read More
August 30, 2010 at 4:28 PM • Comment
Amid a buzz of speculation over whether the Bank of Japan would intervene, the Japanese Yen hit yet another 15 year high against the U.S. Dollar last Tuesday.Read More
August 30, 2010 at 4:21 PM • Comment
USDJPY saw volatile trading last week, initially starting the week off on a firm note by making its weekly high of 85.69 on Monday. The pair then began trading lower after Prime Minister Naoto Kan and BOJ Governor...Read More
August 30, 2010 at 4:13 PM • Comment
USDCAD saw choppy trading in the forex market last week, initially trading higher off of its low for the week of 1.0484 that was seen Monday. The rate continued rising sharply on Tuesday after Canadian Core Retail Sales...Read More
August 30, 2010 at 4:07 PM • Comment
NZDUSD gained a bit more ground last week, boosted primarily by a rise in gold prices. The rate initially started Monday off with a firm tone, but then weakened after news that New Zealand Inflation Expectations were softer...Read More