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

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".

BREAKING DOWN '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.

RELATED TERMS
  1. AUD/USD (Australian Dollar/U.S. ...

    The abbreviation for the Australian dollar and U.S. dollar (AUD/USD) ...
  2. CAD (Canadian Dollar)

    The currency abbreviation or currency symbol for the Canadian ...
  3. Currency Pair: EUR/USD (Euro/U.S. ...

    The abbreviation for the euro and U.S. dollar (EUR/USD) pair ...
  4. CAD

    What currency is CAD? CAD is the currency abbreviation or currency ...
  5. USD/JPY (U.S. Dollar/Japanese Yen) ...

    The abbreviation for the U.S. dollar and Japanese yen (USD/JPY) ...
  6. NZD/USD (New Zealand Dollar/U.S. ...

    The abbreviation for the New Zealand dollar and U.S. dollar (NZD/USD) ...
Related Articles
  1. Trading

    Forex Tutorial: Reading a Forex Quote and Understanding the Jargon

    One of the biggest sources of confusion for those new to the currency market is the standard for quoting currencies. In this section, we'll go over currency quotations and how they work in currency ...
  2. Trading

    What is an Indirect Quote?

    An indirect quote expresses the amount of foreign currency required to buy or sell one unit of the domestic currency in the foreign exchange markets.
  3. Trading

    How To Calculate An Exchange Rate

    An exchange rate is how much it costs to exchange one currency for another.
  4. Investing

    Here's How You Calculate An Exchange Rate

    Struggling to get a grasp on exchange rates? Here's what you need to know.
  5. Trading

    What Do Weak Dollar And Strong Dollar Mean?

    A weak dollar and a strong dollar describe the strength of the U.S. dollar in comparison to other currencies in the foreign exchange market.
  6. Trading

    The Canadian Dollar: What Every Forex Trader Needs To Know

    Canada is becoming an increasingly viable alternative to the U.S. dollar, making it more important in the forex market.
  7. Trading

    Drastic Currency Changes: What's The Cause?

    Currency fluctuations often defy logic. Learn the trends and factors that result in these movements.
  8. Trading

    The 6 Most-Traded Currencies And Why They're So Popular

    Every currency has specific features that affect its underlying value and price movements in the forex market.
  9. Trading

    Top 6 Most Tradable Currency Pairs

    The most frequently traded currency pair is the euro/U.S. dollar. The euro is the base currency in the pairing, while the dollar is the quote currency.
  10. Trading

    4 Of The Most Popular Traded Currencies

    Every day, trillions of dollars trade in the forex market. Here are a few of the most popular currencies, and some characteristics for each.
RELATED FAQS
  1. How can I get 100k in a Canadian bank to a U.S. Investment firm with minimal loss ...

  2. Why is currency always quoted in pairs?

    When reading currency quotes, you have probably noticed that there is only a single quote for a pair of currencies. Currency ... Read Answer >>
  3. How can I trade in cross currency pairs if my forex account is denominated in U.S. ...

    The forex market allows individuals to trade on nearly all of the currencies in the world. However, most of the trading is ... Read Answer >>
  4. Why is the U.S. dollar shown on the top of some currency pairs and on the bottom ...

    All currencies are traded in pairs. The first currency in the pair is called the base currency while the second is called ... Read Answer >>
  5. What is the value of one pip and why are they different between currency pairs?

    In forex markets, currency trading is done on some of the world's most powerful currencies. The major currencies traded are ... Read Answer >>
  6. What do the terms weak dollar and strong dollar mean?

    The two terms, weak dollar and strong dollar, are generalizations used in the foreign exchange market to describe the relative ... Read Answer >>
Hot Definitions
  1. Quantitative Trading

    Trading strategies based on quantitative analysis which rely on mathematical computations and number crunching to identify ...
  2. Bond Ladder

    A portfolio of fixed-income securities in which each security has a significantly different maturity date. The purpose of ...
  3. Duration

    A measure of the sensitivity of the price (the value of principal) of a fixed-income investment to a change in interest rates. ...
  4. Dove

    An economic policy advisor who promotes monetary policies that involve the maintenance of low interest rates, believing that ...
  5. Cyclical Stock

    An equity security whose price is affected by ups and downs in the overall economy. Cyclical stocks typically relate to companies ...
  6. Front Running

    The unethical practice of a broker trading an equity based on information from the analyst department before his or her clients ...
Trading Center