What is the CAD in Forex?
CAD (Canadian Dollar)
Forex Trading Glossary
Quick Answer: The Canadian Dollar is a commodity-linked currency moved by oil prices, Bank of Canada policy, and global risk appetite.
What is the CAD (Canadian Dollar)?
The Canadian Dollar (CAD) is a commodity currency influenced by crude oil prices, Bank of Canada policy, and global risk appetite. Popular CAD pairs include USD/CAD, CAD/JPY, and EUR/CAD.
Drivers of CAD
- Energy exports: Oil headlines and pipeline disruptions move CAD quickly.
- U.S. economy: Canada's largest trading partner dictates demand.
- Rate differentials: Bank of Canada guidance affects carry trades.
- Risk sentiment: CAD strengthens when global growth accelerates.
Watchlist
Monitor Bank of Canada meetings, OPEC decisions, and crude inventory data to anticipate CAD volatility.
Trading Approaches
- Macro themes: Align CAD positions with the outlook for oil and North American growth.
- Cross-pair plays: Use CAD/JPY to express risk appetite shifts.
- Hedging: Canadian exporters hedge revenues using forward contracts.
- Seasonality: Energy demand cycles can create recurring CAD trends.
Related Terms
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