Forget what you’ve probably heard about Canada – they’re not only about Hockey, Maple syrup and Celine Dion, they’re also a country with quite a bit of financial influence, and that is mostly obvious in the fact that the Canadian Dollar is most often paired with its neighbor to the south.
We’ve spoken at great lengths about the impact the USD has on global financial markets and other currency pairings being traded as a binary option, it is the #1 currency in the world, and with good reason.
The US economy, even in times of distress, is still considered to be the leader in global economics, the Chinese economy is making great strides and in some areas is likely more advanced than its US counterpart, but the Chinese lack the clout that the US swings all over the world.
The US can use its many assets and consumer products to insure profitability and financial might through the export of goods – from cars to computers and food, the US exports those all across the globe – to Europe, Asia and Africa too.
But one of the most financially stable trade partners for the US is not across oceans and weeks of ship to ship transports, but a mere hours of travel by train or truck – Canada.
As recently as 2012 the US exported over 290 billion Dollars’ worth of products to Canada and imported over 320 Billion, with the average trades exceeding 1.9 Billion US dollars daily.
The countries trade anything from lumber to computer chips, from cars to food items and even the entertainment industry plays a pivotal role in the flow of cash between the two nations.
As you can probably imagine, with this particular pairing of currencies – trade is perhaps the most crucial element of impact, with an unusually high number of daily transactions, any change or even perception of change can have a vast impact on trades, and as a result on each individual currency and quite quickly after that – the currency pairing in question.
There are a number of vital signs you should look into when trading binary options on the USD/CAD pairing – first and foremost – any change in the amount of trades will have a direct and immediate impact on both sides of the pairing, secondly – GDP reports or other consumer based reports will tend to have a secondary, slightly less immediate impact – if financial conditions turn for the worse in either nation, both economies will suffer. And finally – diplomacy still plays a crucial part despite the warm relations at play here – any change in the political climate, with an emphasis on financial intentions can impact these currencies greatly.
One difference between this pairing and others can be attributed to their close connection – In most occasions, when the FED (federal reserve) decides to increase the worth of the US Dollar other currency pairings may see a negative impact to the other side of the pairing, but in most instances in the past, when such conditions have occurred, the increase was felt across both sides of the pairing, simply put – a stronger US Dollar requires the CAD to keep up with it, forcing a rise in its worth.
Place yourself correctly on this particular currency pairing with good trades and they’ll be lining up that near 4,000 mile border with your hard earned gains.