|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 23, 2010 at 9:57 AM • Comment
Almost all European stock markets were in the red, and as this text is being written, U.S. markets were poised to close the day lower, too. In the Asian session, Japan, and Shanghai were down, while Korean shares...Read More
August 20, 2010 at 8:51 AM • Comment
Jobless claims rise to the highest level since November 2009, Philadelphia Fed Survey collapses.Read More
August 19, 2010 at 10:27 AM • Comment
Equities in South America, China and Europe were down today, while U.S. and Japan managed to rally. Volumes remain subdued however, and there is little momentum in either direction.Read More
August 18, 2010 at 12:03 PM • Comment
With no major market-moving news in the queue for this week, most currencies are moving within established ranges. Last week's precipitous decline in both the EUR/USD and GBP/USD are consolidating down toward the lows. In classical technical analysis, when...Read More
August 17, 2010 at 4:42 PM • Comment
Equity markets around the world were higher today on pieces of positive news from Asia, and Europe. Oil and gold also rose, with the bullish environment in equities and stocks supporting commodities on a general basis. Technical picture is...Read More