USDCAD

USDCAD, often denoted USD/CAD in FX quotes, is the currency pair that expresses the value of the United States dollar in terms of Canadian dollars. It is quoted as the amount of CAD needed to buy one USD; for example, a rate of 1.25 CAD per USD implies 1 USD equals 1.25 CAD. The pair reflects the relative strength of the two economies and their monetary policies.

Trading and liquidity: It is one of the most liquid major currency pairs in the spot forex market. Trading occurs continuously on major electronic platforms and through interbank markets, with liquidity peaking during the London and New York sessions. The pair is also traded via futures and options on exchange-provided products.

Key drivers: Oil and energy markets are important because Canada is a major oil exporter; thus CAD often strengthens when oil prices rise. Interest rate differentials between the US Federal Reserve and the Bank of Canada influence the rate and direction of the pair. US macro data and risk sentiment, geopolitical events, and Canadian economic releases also shape moves.

Performance characteristics: The pair tends to exhibit higher sensitivity to commodity prices and global growth signals than some other G-7 pairs. It may display amplified moves during periods of oil-price volatility or policy surprises. Traders watch for central bank guidance, employment data, and oil-market developments.

Usage: Investors may use USDCAD for hedging CAD exposure or for speculative bets on dollar or commodity trends. As with other FX pairs, liquidity and spreads can vary with market conditions and time of day.