Another currency pair that binary options traders love is the USD/CAD. This pair shows the value of one American dollar in Canadian dollars.
The Canadian dollar may seem like an unstable currency, but if you read more about it, you’ll find that this is one of the most easily predictable currencies in the world. It is also the seven most traded type of currency in the world, so its value is quite volatile.
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Oil is the asset that has the biggest influence on the value of the Canadian dollar, but the price of the American dollar can also influence the CAD’s value. We rarely see a currency so influenced by the value of crude oil, but this isn’t a coincidence – Canada takes second place in the world in terms of oil reserves. 99% of the crude oil from Canada is exported to the United States. According to statistics, over 2,000,000 barrels of oil are transferred to the US every day, so you can see why this asset influences the Canadian dollar.
A good example of how oil prices influence the value of the USD/CAD is the following: If oil price increases, the value of the Canadian dollar will also increase, therefore the quote of the USD/CAD will fall.
Another major factor for the quote of the USD/CAD is the economic climate in the US. The Federal Reserve influences the value of both currencies and bed economic health will certainly make both dollars more volatile.
The USD/CAD quote is influenced by many things and this is why advanced traders prefer this currency pair as their main asset. Some of the most common things that can have an impact on the USD/CAD are regional and international political and economical issues. Trader perceptions and market psychology can also have a huge impact on the quote of this Forex pair.