Investopedia

Continue to Site »

USD/CAD (U.S. Dollar/Canadian Dollar)

Filed Under » , , , , , , ,
Dictionary Says

Definition of 'USD/CAD (U.S. Dollar/Canadian Dollar)'

The abbreviation for the U.S. dollar and Canadian dollar (USD/CAD) currency pair or cross. The currency pair tells the reader how many Canadian dollars (the quote currency) are needed to purchase one U.S. dollar (the base currency).

Trading the USD/CAD currency pair is also known as trading the "Loonie".
Investopedia Says

Investopedia explains 'USD/CAD (U.S. Dollar/Canadian Dollar)'

The value of the USD/CAD pair is quoted as 1 U.S. dollar per X Canadian dollars. For example, if the pair is trading at 1.50 it means that it takes 1.5 Canadian dollars to buy 1 U.S. dollar.

The USD/CAD is affected by factors that influence the value of the U.S. dollar and/or the Canadian dollar in relation to each other and other currencies. For this reason, the interest rate differential between the Federal Reserve (Fed) and the Bank of Canada (BoC), will affect the value of these currencies when compared to each other. When the Fed intervenes in open market activities to make the U.S. dollar stronger, for example, the value of the USD/CAD cross will increase because it will take more Canadian dollars to purchase the stronger U.S dollar.

The USD/CAD tends to have a negative correlation with the AUD/USD, GBP/USD and the NZD/USD currency pairs because they are quoted in U.S. dollars.

Articles Of Interest

  1.

    Currency Exchange: Floating Rate Vs. Fixed Rate

    Baffled by exchange rates? Wonder why some currencies fluctuate while others are pegged? This article has the answers.

  2. Commodity Prices And Currency Movements

    Find out which currencies are most affected by fluctuations in gold and oil prices, and improve your trading.

  3. How are international exchange rates set?

    International currency exchange rates display how much one unit of a currency can be exchanged for another currency. Currency exchange rates can be floating, in which case they change continually ...

  4. Profiting From A Weak U.S. Dollar

    Learn how to allocate your investments when the U.S. dollar is down.

  5. 8 Basic Forex Market Concepts

    We go over some of the things you need to understand before you can trade currencies.

  6. Forex: Identifying Trending And Range-Bound Currencies

    Gain a trading edge by learning how macroeconomic forces play out differently for various pairs in the forex market.

  7. A Primer On The Forex Market

    Moving from equities to currencies requires you to adjust how you interpret quotes, margin, spreads and rollovers.

  8. The New World Of Emerging Market Currencies

    Take advantage of foreign currency markets without stepping out of your house.

  9. Predict Inflation With The Producer Price Index

    Find out how the PPI can be used to gauge the overall health of the economy.

  10. Trade Forex On Herd Instinct

    Use caution and commonsense when making trades according to herd instinct – use stop losses, avoid complacency and plan your exit strategy.
comments powered by Disqus
Marketplace
Hot Definitions

  1. Fool In The Shower

    The notion that changes or policies designed to alter the course of the economy should be done slowly, rather than all at once.

  2. Pattern Day Trader

    An SEC designation for traders who trade the same security four or more times per day (buys and sells) over a five-day period, and for whom same-day trades make up at least 6% of their activity for that period.

  3. Cost-Push Inflation

    A phenomenon in which the general price levels rise (inflation) due to increases in the cost of wages and raw materials.

  4. Happiness Economics

    The formal academic study of the relationship between individual satisfaction and economic issues, such as employment and wealth.

  5. Affluenza

    A social condition arising from the desire to be more wealthy, successful or to "keep up with the Joneses." Affluenza is symptomatic of a culture that holds up financial success as one of the highest achievements.

  6. Icarus Factor

    The term Icarus factor describes a situation where managers or executives initiate an overly ambitious project which then fails. Fueled by excitement for the project, the executives are unable to reign in their misguided enthusiasm before it is too late to avoid the failure.
Trading Center