United States dollar - Canadian dollar (USD/CAD)

USD/CAD shows how many Canadian dollars are required to buy one US dollar. The pair reflects the exchange rate between the United States and Canada and is one of the most actively traded North American currency pairs.

Example: If USD/CAD = 1.3500, one US dollar equals 1.35 Canadian dollars.

If the price rises to 1.3700, the US dollar has strengthened against the Canadian dollar.

If the price falls to 1.3300, the Canadian dollar has strengthened relative to the US dollar.

In every forex pair:

• USD is the base currency
• CAD is the quote currency

Price movements are measured in pips.

• 1 pip = 0.0001
• The fourth decimal place represents one pip

Examples:

• 1.3500 → 1.3501 = 1 pip
• 1.3500 → 1.3510 = 10 pips
• 1.3500 → 1.3600 = 100 pips

USD/CAD is sometimes called the 'Loonie' pair because the Canadian dollar is nicknamed the Loonie. The pair is strongly influenced by oil prices and the close economic relationship between the US and Canada.

USD/CAD trades in the global forex market which operates continuously from Monday to Friday across major financial centers.

• Sydney
• Tokyo
• London
• New York

Typical trading activity:

• Asian session – generally lower liquidity
• London open – increased activity as European traders enter the market
• London–New York overlap – strongest liquidity and volatility
• Late US session – trading activity slows

USD/CAD often reacts strongly to announcements such as:

• Federal Reserve interest rate decisions
• Bank of Canada monetary policy announcements
• US inflation and employment data
• Canadian GDP and oil market developments

• Interest Rate Differences – Monetary policy decisions by the Federal Reserve and the Bank of Canada influence currency demand.
• Oil Prices – Canada is a major oil exporter, and rising crude oil prices often strengthen the Canadian dollar.
• Economic Data – Indicators such as inflation, GDP growth and employment influence expectations for future interest rates.
• Trade Relationships – The US and Canada have strong trade ties, and changes in trade flows may influence the pair.
• Global Risk Sentiment – Changes in global economic optimism or uncertainty may influence demand for the US dollar.

If USD/CAD trades near 1.3500 support, traders may expect a rebound toward 1.3700 if buying pressure appears.

Medium-term expectations often depend on interest rate policy differences between the Federal Reserve and the Bank of Canada.

Long-term forecasts consider global energy demand, economic growth differences and capital flows between the US and Canada.

• Central Bank Policy – Interest rate decisions by the Federal Reserve and the Bank of Canada remain key drivers.
• Energy Market Trends – Changes in oil prices can strongly influence the Canadian dollar.
• Economic Growth Differences – Stronger growth in either country may attract international investment.
• Inflation Trends – Inflation levels can influence future interest rate decisions.
• Geopolitical Developments – Political tensions or financial crises may increase currency volatility.

• Trend Trading – Traders follow macroeconomic and commodity-driven trends.
• Breakout Trading – Breakouts above resistance or below support may signal strong momentum.
• News Trading – Central bank announcements and economic reports often trigger volatility.
• Support and Resistance Trading – Historical price levels help traders identify entry and exit points.

• High liquidity compared with many currency pairs
• Strong macroeconomic drivers including oil prices
• Volatility creating trading opportunities

• Oil price volatility affecting the Canadian dollar
• Unexpected macroeconomic developments
• Volatility during central bank announcements

Why is USD/CAD called the Loonie pair?

The nickname comes from the Canadian dollar, which features a loon bird on the one-dollar coin.

What is a pip in USD/CAD?

A pip represents the fourth decimal place in the exchange rate. For example a move from 1.3500 to 1.3501 equals one pip.

When is USD/CAD most active?

The pair is usually most active during the London and New York trading sessions.

What news affects USD/CAD the most?

Federal Reserve decisions, Bank of Canada announcements and oil price movements.