Trade USD/CAD
US Dollar / Canadian Dollar
Known as "the Loonie", USD/CAD is the most trade-integrated major pair, with Canada's oil exports and the US representing the world's largest bilateral trading relationship.
Specifications
About USD/CAD
USD/CAD measures the US dollar against the Canadian dollar, a currency whose value is closely tied to crude oil because energy accounts for a large share of Canada's export revenue. When WTI crude prices rise, the Canadian dollar tends to appreciate, sending USD/CAD lower. The pair also responds to Bank of Canada versus Federal Reserve policy divergence and to shifts in US-Canada trade conditions. The US and Canada conduct more bilateral trade than any other two nations, making data from both economies relevant drivers.
Key Price Drivers
- WTI crude oil prices and Canadian energy export revenues
- Bank of Canada versus Federal Reserve interest rate divergence
- US-Canada trade flows and cross-border economic data
- Canadian employment reports and inflation readings
Peak Trading Hours
USD/CAD is most active during the North American session when both US and Canadian markets are open simultaneously.
North American session (13:00-20:00 UTC)
Canadian employment data (released Fridays at 12:30 UTC) and Bank of Canada rate decisions frequently trigger sharp intraday moves.
How to Trade USDCAD on StoicFX
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FAQ
Why is USD/CAD called the Loonie?
The Canadian dollar takes its nickname from the common loon bird printed on the Canadian one-dollar coin. Traders adopted "Loonie" as shorthand for the Canadian dollar, and the USD/CAD pair is known by the same name in the broader forex market.
How do oil prices affect USD/CAD?
Canada is one of the world's top crude oil exporters, and energy accounts for a major portion of its export earnings. When oil prices rise, Canadian export revenues increase, boosting demand for the Canadian dollar and pushing USD/CAD lower. When oil prices fall, the opposite dynamic takes hold. WTI crude is the most relevant benchmark for the pair given its proximity to Canadian production.
What is the Bank of Canada's role in USD/CAD moves?
The Bank of Canada sets the overnight lending rate, which influences the interest rate differential between Canada and the US. When the BoC raises rates faster or holds higher than the Fed, the yield advantage attracts capital into Canadian assets and supports the Loonie. BoC rate decisions, along with the Monetary Policy Report released quarterly, are primary event risks for the pair.
Is USD/CAD a good pair to trade during the Asian session?
Liquidity in USD/CAD is considerably thinner during the Asian session. The pair is designed for the North American window, most of the volume, tighter conditions, and meaningful data releases all fall between the Toronto and New York market overlap from 13:00 UTC onward.
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