USDCAD: That’s Loonie USDCAD: That’s Loonie USDCAD: That’s Loonie

USDCAD: That’s Loonie

Macro FX

Saxo Group

Summary:  Welcome to Canada, the land of beavertails, snow and more natural resources than you can shake a hockey stick at. From oil to timber and natural gas, Canada is one of the world's' major commodity exporters - which is why it's national currency, the Canadian dollar, is known as a commodity currency. As the sixth-most traded currency globally, the CAD accounts for 5% of daily trades.


USDCAD is abbreviation for the US Dollar/Canadian dollar currency pair. The exchange rate between these two currencies is quoted as 1 US Dollar (the base currency) per X Canadian dollars (the quote currency). So, if you see USDCAD quoted by a bank or exchange desk at 1.26 on your travels, you’d pay 1.26 Canadian dollars for 1 USD. While the two currencies have reached parity at some points, the US Dollar has traditionally been the stronger of the two.

What drives USDCAD?

USDCAD is driven by various factors affecting the value of the US Dollar and Canadian dollar in relation to each other. Economic indicators like the monthly US jobs report or interest rate announcements by the Federal Reserve and Bank of Canada (BoC) can all move USDCAD higher or lower.

Canada’s commodity exports – particularly oil – also play a major role in setting the value of the Canadian dollar. If the price of oil rises, the Canadian dollar should also rise – and vice versa. In 2016, for example, the Canadian dollar fell to a record low of 1.46 as oil prices tumbled below $30 per barrel, the lowest price in decades.

The call of the Loonie

It’s a trader’s tradition. Each major currency pair comes with a handy moniker and traders refer to USDCAD as the “Loonie”. Why? Canadians have nicknamed their one-dollar coin the Loonie as it features a loon on its face. With its famed mournful call, the loon has come to symbolise Canada, making “Loonie” an apt nickname for a currency tied so tightly to nature’s resources.

Trade USDCAD your way

With Saxo, you can trade USDCAD and other FX pairs with true flexibility. Buy and sell currency pairs with Spot FX, get a jump on future prices with FX options or hedge your exposure with FX swaps. You can also trade cryptocurrencies against USD and other major currencies with our Crypto FX pairs.

Please note that FX related instruments are traded with leverage and small price fluctuations can lead to larger losses if market volatility increases. FX markets are sensitive to political and macroeconomic events, which can drive prices higher or lower rapidly. Therefore, you should ensure that you understand the risks before trading.

Disclaimer

Saxo Capital Markets (Australia) Limited prepares and distributes information/research produced within the Saxo Bank Group for informational purposes only. In addition to the disclaimer below, if any general advice is provided, such advice does not take into account your individual objectives, financial situation or needs. You should consider the appropriateness of trading any financial instrument as trading can result in losses that exceed your initial investment. Please refer to our Analysis Disclaimer, and our Financial Services Guide and Product Disclosure Statement. All legal documentation and disclaimers can be found at https://www.home.saxo/en-au/legal/.

The Saxo Bank Group entities each provide execution-only service. Access and use of Saxo News & Research and any Saxo Bank Group website are subject to (i) the Terms of Use; (ii) the full Disclaimer; and (iii) the Risk Warning in addition (where relevant) to the terms governing the use of the website of a member of the Saxo Bank Group.

Saxo News & Research is provided for informational purposes, does not contain (and should not be construed as containing) financial, investment, tax or trading advice or advice of any sort offered, recommended or endorsed by Saxo Bank Group and should not be construed as a record of our trading prices, or as an offer, incentive or solicitation for the subscription, sale or purchase in any financial instrument. No representation or warranty is given as to the accuracy or completeness of this information. All trading or investments you make must be pursuant to your own unprompted and informed self-directed decision. No Saxo Bank Group entity shall be liable for any losses that you may sustain as a result of any investment decision made in reliance on information on Saxo News & Research.

To the extent that any content is construed as investment research, such content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, would be considered as a marketing communication.

None of the information contained here constitutes an offer to purchase or sell a financial instrument, or to make any investments.Saxo Capital Markets does not take into account your personal investment objectives or financial situation and makes no representation and assumes no liability as to the accuracy or completeness of the information nor for any loss arising from any investment made in reliance of this presentation. Any opinions made are subject to change and may be personal to the author. These may not necessarily reflect the opinion of Saxo Capital Markets or its affiliates.

Please read our disclaimers:
- Full Disclaimer (https://www.home.saxo/en-au/legal/disclaimer/saxo-disclaimer)
- Analysis Disclaimer (https://www.home.saxo/en-au/legal/analysis-disclaimer/saxo-analysis-disclaimer)
- Notification on Non-Independent Investment Research (https://www.home.saxo/legal/niird/notification)

Saxo Capital Markets (Australia) Limited
Suite 1, Level 14, 9 Castlereagh St
Sydney NSW 2000
Australia

Contact Saxo

Select region

Australia
Australia

The Saxo trading platform has received numerous awards and recognition. For details of these awards and information on awards visit www.home.saxo/en-au/about-us/awards

Saxo Capital Markets (Australia) Limited ABN 32 110 128 286 AFSL 280372 (‘Saxo’ or ‘Saxo Capital Markets’) is a wholly owned subsidiary of Saxo Bank A/S, headquartered in Denmark. Please refer to our General Business Terms, Financial Services Guide, Product Disclosure Statement and Target Market Determination to consider whether acquiring or continuing to hold financial products is suitable for you, prior to opening an account and investing in a financial product.

Trading in financial instruments carries various risks, and is not suitable for all investors. Please seek expert advice, and always ensure that you fully understand these risks before trading. Saxo Capital Markets does not provide ‘personal’ financial product advice, any information available on this website is ‘general’ in nature and for informational purposes only. Saxo Capital Markets does not take into account an individual’s needs, objectives or financial situation. The Target Market Determination should assist you in determining whether any of the products or services we offer are likely to be consistent with your objectives, financial situation and needs.

Apple, iPad and iPhone are trademarks of Apple Inc., registered in the US and other countries. AppStore is a service mark of Apple Inc.

The information or the products and services referred to on this website may be accessed worldwide, however is only intended for distribution to and use by recipients located in countries where such use does not constitute a violation of applicable legislation or regulations. Products and Services offered on this website is not intended for residents of the United States and Japan.

Please click here to view our full disclaimer.