The extremely high volume of cross-border trading activities between the USA and Canada has firmly established the USD to CAD currency pair as one of the most liquid on the global market. This pair is known also as the “Loonie” due to the image of a loon depicted on the CA$1 coin.
Much like both the AUD to USD and NZD to USD pairs, the performance of the USD to CAD pair is influenced by international commodities trading. The Canadian dollar is seen as a commodity currency due to the country’s considerable natural resources: oil, timber and gas.
Oil is one resource in particular that can have the most profound effect on the USD CAD rate. Canada is the world’s fourth largest producer of oil, supplying 3.5 million barrels per day to the USA in 2018 – a figure that represented 48% of the USA’s total crude oil imports for that year.