Reading the USD/CAD Price

The USD has been the most traded currency globally. It has a strong reputation, and hence, countries consider the USD a financial reserve. Thus, generating a higher value to the currency than any other currency in the world. Between USD and CAD, the USD is stronger.

Nevertheless, the 2008 recession had a great impact on the value of the USD. The corrective measures instituted by the US Federal Reserve (Fed) led to CAD performing well against USD. Consequently, the CAD could reach 0.95 against the USD.

The performance of the tourism sector, oil prices, and price fluctuations of commodities have been the decisive factors in the case of the USD/CAD pair. Those interested in USD/CAD investing may have a keen eye for these factors.

The Canadian economy relies on oil exports. Therefore, any issue affecting the oil price can influence the CAD’s value. The year 2016 has been one of the most critical for the USD/CAD trading pair. The unprecedented oil price drop impacted the CAD heavily, taking it to 1.46 against the US dollar.

Major Bodies Influencing the USD/CAD/ Price Drivers

The CAD has been a commodity currency. Therefore, commodity prices can have a direct effect on the CAD’s value. The price drivers influencing USD/CAD investing include:

• The Bank of Canada promulgates monetary policy based on the global commodity index and commodity prices. Consequently causing value fluctuations of CAD with price changes. CAD’s value mainly depends on the value of commodities it exports.
• Canada exports oil, mainly to the US. Hence, the oil price change determines the value of CAD against USD. Investors can expect a better value for CAD whenever the crude oil price increases.
• The Bank of Canada examines the market scenario and economic conditions and revises interest rates periodically. The same is done by the US Federal Reserve in the USA. The revised interest rates will have a direct effect on USD/CAD trading.
• GDP growth rates in either country can lead to value changes. Monitoring the GDP value is a vital part of forex investment, for any currency pair including USD/CAD.
• Newly promulgated international trade agreements, new policies, newly introduced tariffs, changes in financial regulations, etc. are also other price drivers.

An expert by your side can prevent ambiguities and help you invest in the right currency at the right time. You may talk to our professionals if you are looking for USD/CAD trading.

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