The Australian dollar appeared in 1966. It was introduced instead of the Australian pound. The history of the Canadian dollar began even earlier. This currency went into circulation in 1858.
USD is not directly present on the AUD/CAD chart; therefore, the currency pair falls into the category of crosses. At the same time, without the participation of the USD, transactions with this financial instrument are still not made. AUD is first converted to USD and only then to CAD and vice versa. Quotes of the currency pair appear on the platform with 4 or 5 decimal places. It all depends on which platform you use for trading.
AUD/CAD is not a popular instrument. Most traders rarely use it for trading. AUD/USD and USD/CAD currency pairs are much more popular. They are considered more liquid. In addition, the spread on the specified currency pairs is smaller.
The most active trading on AUD/CAD takes place on Wednesday and Friday. The greatest volatility occurs at the intersection of the American and European trading sessions, as well as on the Asian.
The Canadian economy is largely linked to the United States’ economy. Both countries are partners in the NAFTA contract. It is necessary to monitor the release of fundamental economic indicators and to monitor the level of the two countries’ trade balance. Brent crude prices are also likely to have a strong impact on the AUD/CAD chart. This is due to the fact that Canada is one of the largest exporters of “black gold” to the world market.
The economy of Australia is more connected with the countries of Southeast Asia and New Zealand. The country specializes in the export of grain, food, wool, gas, coal, metals and oil. Much of the Australian products come from China, Japan and India. The country also has strong economic ties with the United States.
Changes in the trade balance with major partners have a huge impact on the value of the Australian currency. The cost of gold and wheat can also have a significant impact on the AUD. We recommend following the policy of the Reserve Bank of Australia, the level of unemployment in the country and other important macroeconomic indicators.
This cross-pair is characterized by sharp jumps in the exchange rate with consistent movement within the formed price range. The quotes history shows that AUD/CAD quotes dropped many times. In the midst of the 2008 crisis, quotes reached a level of 0.7154. Previously, the pair reached a minimum in 1996. Back then, the AUD/CAD exchange rate fell to a mark of 1.1096.
This cross-pair has good potential for a medium and long-term trade since it tends to move for a long time in the same price band. Keep in mind that occasionally the exchange rate moves beyond the indicated framework. Trading this currency pair is quite risky, especially on small timeframes. Unexpected jumps can bring both high profits and substantial losses.
Scalping proponents, on the contrary, value this financial instrument. The sudden intraday jumps make it attractive for a given trading style. However, the relatively large spread substantially negates this advantage of AUD/CAD.