What Does the USDCAD Pair Represent and Why Is It Considered a Commodity Currency?

USDCAD is the ticker symbol for the Forex pair United States Dollar/Canadian Dollar, one of the major currency pairs as it’s one of the most traded in the world, it ranks as the 5th most liquid currency pair; and it is included in the basket for the US dollar Index (USDX) as the 4th most influential currency pair.

We cover why this currency pair is largely referred to as a commodity currency and how this affects oil prices.

USD/CAD

What Is USDCAD?

A currency pair shows you how much of one currency is required to purchase one unit of another currency.

The first three letters of the quote represent the abbreviation of the base currency in this case USD (United States Dollar), while the second shows the abbreviation of the terms currency CAD (Canadian Dollar) also known as quote currency since the actual quote is given in this currency.

The USD/CAD pair shows traders how many Canadian Dollars are required to buy one US Dollar.

The popularity of this pair comes from the large amount of cross border trading that happens between the United States and Canada.

USDCAD foreign exchange currency represented with United States Dollar and Canadian Dollar with Baxia Markets logo

Why Is USDCAD Considered a Commodity Currency?

The CAD is also known as “The loonie” which refers to the $1 Canadian coin and derives its nickname from the picture of a solitary loon on the reverse side of the coin. 

It is considered a commodity currency because it has a heavy dependence on its export of raw materials and natural resources, particularly Oil since it’s the most exported commodity.

How to Trade USDCAD?

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