Throughout its use as a foreign currency, the Canadian dollar has fluctuated between being an independent currency or tied to the U.S. dollar. By being tied to the U.S. dollar and producing the fourth largest amount of petroleum exports, Canadian dollar trading has a direct correlation with oil prices.
With China heavily relying on Canada’s natural resources of energy and wood to build its infrastructure, a slowdown in China’s growth could also impact Canada’s economy.
With every currency tied to a country’s economic prosperity, Canada’s employment numbers, interest rates, and monetary policies all influence the country’s currency.
Going Looney for the ‘Loonie’
Investors also refer to the Canadian dollar as the ‘loonie’ which is a nickname derived from the Canadian one-dollar coin having an image of a loon on it.
Accounting for 2% of all global reserves makes the Canadian dollar a highly valued and sought-after currency. By continuing to become a more viable alternative investment in the foreign exchange market, investors have many issues to consider when dealing with the Canadian dollar.
As with any foreign currency, trading in the global market comes with numerous volatile conditions that could impact profits. To hedge against the volatility, Bridge Capital X has a dedicated team of financial advisors driven to results that generate profits for our clients.