Because of the volume involved, it creates a huge amount of de | 🎯Accurate FX Analysis

Because of the volume involved, it creates a huge amount of demand for Canadian dollars.

Also, take note that Canada’s economy is dependent on exports, with about 85% of its exports going to its big brother down south, the U.S.

Because of this, USD/CAD can be greatly affected by how U.S. consumers react to changes in oil prices.

If U.S. demand rises, manufacturers will need to order more oil to keep up with demand. This can lead to a rise in oil prices, which might lead to a fall in USD/CAD.

If U.S. demand falls, manufacturers may decide to chill out since they don’t need to make more goods. Demand for oil might fall, which could hurt demand for the CAD.

Oil has a negative correlation with USD/CAD of about 93% between 2000 through 2016.

When oil goes up, USD/CAD goes down. When oil goes down, USD/CAD goes up.

And to make the correlation clearer, we can invert USD/CAD to show how both markets move pretty much at the same time (i.e., crude oil will gain value with the Canadian dollar while the U.S. dollar falls…and vice versa. Check it out in the chart below:

Check it out in the chart below: