What Moves the CAD?

U.S. Economic Data

U.S. economic data usually prints roughly at the same time as Canadian data.

On the one hand, the negative data from the US coupled with positive data from Canada could lead to a massive drop in the USD/CAD’s value.

On the other hand, positive U.S. data and poor Canadian data could send the USD/CAD soaring high!

Mergers and Acquisitions

Because of the proximity between the U.S. and Canada, company mergers and acquisitions happen quite often.

This causes a huge amount of money to flow between the two countries, which creates a significant effect on the foreign exchange market.

For example, in order for a U.S. company to buy out a Canadian company, it must first exchange its U.S. dollars for Canadian dollars to complete the transaction.

Imagine the amount of money that flows through the foreign exchange market just to seal the deal!

Trading the USD/CAD

USD/CAD is traded in amounts denominated in USD. Standard lot sizes are 100,000 USD and mini lot sizes are 10,000 USD.

The pip value, which is denominated in Canadian dollars, is calculated by dividing 1 pip of USD/CAD (that’s 0.0001) by USD/CAD’s current rate.

Profit and loss are denominated in Canadian dollars.

For one standard lot position size, each pip movement is worth 10 CAD.

With one mini lot position size, each pip movement is worth 1 CAD.

For example, if the current exchange rate of USD/CAD is 1.1000 and you want to trade one standard lot, then one pip would equate to 9.90 USD.

Margin calculations are based on US dollars.

With leverage of 100:1, 1,000 USD is needed to trade 100,000 USD/CAD.

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