Foreign exchange trading or forex as it is popularly called is a popular market for speculators. The forex markets are open 24/7 because of the time changes in different countries. There is no specific exchange for forex trading as the trades take place between central banks, banks, brokers, fund managers and other traders.
Forex markets are as risky as they are rewarding. Every trader, who wishes to trade in the forex markets has to be prepared well in advance, in order to make profits. It is advisable to know important information about the major currencies in the market and how their value is effected by different economic and political happenings.
Here is a quick guide from the experts at Knightsbridge FX, to help you understand about the Canadian Dollar.
- Canadian dollar is one of the major seven currencies that are mostly traded in the forex markets. These seven currencies constitute more than 80% volume of the forex markets.
- Canadian dollar or the loonie, as it is popularly called is the fifth-most held reserve currency.
- The Canadian dollar is supported by the Bank of Canada. The Bank of Canada takes care of the policies that help to increase economic growth and employment, while keeping inflation in check. However, it does not intervene in the currency markets.
- Canada ranks tenth in terms of GDP measured in terms of U.S. Dollars. The country boasts of a strong growth record in the last 20 years. Though there were 2 brief periods of recession in 1990 and 2009, Canada has a good growth rate. The government has enforced strict fiscal policies to lower inflation rates and budget deficits.
- Majority of the Canadian exports are in commodities. Canada is a major producer of wood products, minerals, petroleum products and grains. The value of the Canadian dollar is influenced by the prices of these commodities.
- Canada and the United States have a tight trading relationship. Though the economic policies of both the countries are different, some economic and political conditions of the U.S. have an impact on the value of the CAD.
- Major economic data that drives the value of Canadian dollar are GDP, inflation, industrial production, Retail sales, employment and trade balances.
You can know more about the Canadian dollar from the experts at Knightsbridge FX and can trade safely in the forex markets.