The USD/CAD Currency Pair (U.S. Dollar / Canadian Dollar) is the exchange rate of U.S. dollar expressed in Canadian dollars. It expresses the value of one U.S. dollar in Canadian dollars. Forex professionals also nicknamed the Loonie.
The USD / CAD is the 6th most traded pair and represents 5% of total transactions on the FOREX in 2010. From 2008 to 2010, volatility of parity U.S. Dollar / Canadian Dollar has been about 140 pips.
The CAD is renowned for its correlation with oil. Canada being a major oil producer and also a major exporter, the evolution of the Dollar Canadian / Yen is linked to oil prices. When the price of oil rises, the CAD appreciates. This correlation may increase in future years. Canada has the 2nd largest oil reserves in the world and might therefore play an increasingly important role in the formation of oil prices.
The evolution of the USD / CAD pair is also very dependent on the economic health of the U.S., preferred economic partner due to its proximity with the Canada. The economic news on the U.S. thus have a major impact on the USD / CAD.
Since its creation, the USD / CAD has fluctuated between $ 0.9058 reached in 2007 and reached $ 1.6188 in 2002.
The pair USD/CAD is quoted in 4 decimal places but you can sometimes find 5 with some brokers. The exchange rate is floating and subject to the law of supply and demand on the interbank forex market.