Learn more about Canadian Dollars
Canadian Dollar – Trading forex has become one of the businesses considered to have fertile ground for investors. Not only the pre-professional course but for the layman also many who choose to plunge into the world of forex trading can get a big profit.
The ease of market access, leverage, liquidity, and the commission-free trading campaign make some people crazy to get into this market even when they are not prepared. This is what will make many forex traders experience failure conditions in the first experiment or can also get to the next experiment.
Before you can do the same, you should start by learning a lot about the market and also forex trading. It’s important to equip yourself with knowledge, skills, and strategy. One of the things that are considered important to you to know is about the currency. Especially for the currency that you have chosen to trade. In order to help you, here’s a quick review of the Canadian dollar.
Learn more about Canadian Dollars or Loonies
Of the many currencies contained in the world, there are only seven major currencies that will be used as the object of trading in forex. One is the Canadian dollar or also called loonie. In addition to being one of the favorite currencies for traders, Canada’s dollar also has the title as one of the 6th most reserved currency kept by some countries in the world.
Although in forex trading the Canadian currency is the main currency. But in fact, when viewed in terms of GDP, Canada is only in position 10 for the whole world. In addition, in Canada’s main economic sector population is also included in the low economy. But this is certainly not a barrier for Canada to be in 9th place in the category of export amounts for the US dollar.
In addition, the Central Bank behind the Canadian dollar is the Bank of Canada, a bank that has a mission to find a balance between policies that will reduce unemployment and increase the rate of economic growth under inflation.
For information, since 1998 Canada’s central bank has not intervened in Canadian currency. This is because the government decides that intervention is very ineffective.
The Economy Behind Canada’s Currency
For the past 20 years, Canada has experienced fairly strong growth conditions. As early as the 90s, and also 2009 Canada has been in recession. Canada is also a country that often has high inflation. But the excellent fiscal policy and the state of the account that is indeed running and continue to improve make this country can overcome everything.
A trader should be able to analyze the situation of a Canadian country or a country where the currency is traded. It is important for traders to give consideration to Canadian exposure to a commodity.
Canada is a country that produces petroleum, minerals, wood products, and grains. This trading flow from commodity exports can greatly influence the sentiment of investors against Canadian or loonie currency. All data on export and also friends can you get easily through the internet.
As a trader, you also need to understand the strong links between Canada and the United States. These two countries are countries that have counted the interdependence in import-export activities. Traders using the Canadian dollar should be able to monitor the extent to which economic and political developments are taking place in both countries.
However, interesting relationships that occur between these two countries can be different. The market structure on Canadian finance will succeed in providing aid assistance to the country to get out of the many problems that could be bad for the United States. On the other hand, technological developments may also become slower, and instead, make the Canadian economy relatively weak during the period of massive technological developments in the US in 1990.
The Effect of Oil Prices With Canadian Dollars
In the 1990s, the benchmark oil price was still considered stable enough, so there was not much turmoil that would affect the ups and downs of oil prices in the world. But the more there is a new tendency.
In the past, around the 1990s the benchmark of oil prices tended to be stable, not much turmoil affecting the ups and downs of world oil prices. Entering the year 2000-a, the oil portion in the Canadian trade balance in the US has experienced double folding conditions, this condition lasted until 2014. Once into the 2000s Canadian oil began to attract many other countries. So the volume of consumption has increased in 2014.
Once Canadian oil is in great demand and the price is rising, the Canadian exchange rate also increases. So even when the price of oil plummeted, the Canadian dollar also fell. Especially for the Canadian dollar pair vs the US dollar which is very closely watched. This means that the price of oil in the country of Canada will be very positively related to the condition of the dollar and also has a negative correlation with USD / CAD.
Knowing some currencies in a particular country is very important. That way, you can determine what strategy will be used to conduct transactions with the currency of the country concerned.