Among the world currencies traded in the Forex, the Canadian Dollar ranks among the top 8. It’s part of the 80% of volume traded. Many refer to it as the Loonie because of the loon on the back of the $1 Canadian Coin. It’s also among the most widely kept reserve currencies.
So if you’re a trader in the foreign exchange, it’s important not only to become familiar with the currency’s behavior, but with certain factors relating to Canada’s monetary unit.
Whether you’re tempted by carry trades or you like the opportunities Forex affords with currency diversification, this is an interesting currency to get to know. Canada sits in ninth place globally in terms of “dollar-value exports.” The Canadian Dollar wasn’t part of the famous Bretton Woods Agreement, so it floated freely until the first part of the 1960s. For further information on the history of Forex, there are online articles addressing the Forex’s roots.
The Canadian Dollar has the backing of the central bank which tries to establish a balanced economy by boosting employment and spurring growth while maintaining inflation manageable.
Traders who enjoy making money with the Canadian Dollar often incorporate fundamental analysis into their routine. They include important data into their decision making. With this Dollar, looking at GDP for instance is crucial. Retail sales, industrial productivity, trade balance and inflation are also of major importance. And being that Canada relies on commodities, a look at the commodities trade business is said to be necessary.
Tags: currencies, foreign exchange, forex
