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Your guide to trading the AUD/CAD pair

Capital.com's guide to trading AUD/CAD: Everything you need to know on how to trade AUD/CAD. No commission. FCA and CySEC regulated.
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Why is AUD/CAD important to traders?

Trading AUD to CAD is popular with traders around the world. One reason for its popularity is the extent of information available on the economic and political factors of each country, any of which could influence the currency pair.

As with all currency pairings, there is a lot more to the relationship between the two than meets the eye. In the following sections, we're going to take a closer look at Australian dollar to CAD rates and help you fully understand why so many traders and investors find it to be an attractive market to trade.

AUD/CAD

AUD/CAD trading hours

Theoretically you can trade forex pairs 24/7, but there are prime times to trade the AUD/CAD when the currency pair is more volatile. The AUD/CAD is generally busy between 19:00 and 04:30 (GMT).

AUD/CAD history

The Australian dollar was preceded by the Australian pound. For decades, the country used sterling until it became devalued against the US dollar. In the 1960s, the country decided to move forward with the Australian Dollar – a decimal currency – instead of the old imperial system.

As the country is so close to the continent of Asia, import and export between the two countries strengthened the AUD greatly. This relationship has continued to play a prominent role in the rise and fall of AUD value.

The Canadian dollar was rolled out in the 1850s. Originally, the form of currency used was the Canadian pound, but the system was changed as the country wanted to improve and strengthen trade and relationships with the US.

Over time, the Canadian dollar has grown in strength considerably, and the economy of the country is now rated as the 9th largest in the world. Wealth and stability have driven much of this growth, along with a thriving industry of exportable goods.

AUD/CAD

Factors influencing the AUD/CAD rate

The constant movement of the AUD to CAD exchange rate appeals to traders looking to profit from market volatility. This ever-shifting movement can seem confusing to some, so it is important to understand what areas to research to understand which way the market could move.

As with trading between any currency pair, it's important to understand the factors that can affect the prices of these currencies. We're going to take a closer look at how traders can actively follow the AUD to CAD trend to try and determine the best times to open and close trades.

Role of AUD

There are several political and economic factors that come into play when trading the AUD. One important indicator to look out for is the import and export data for Australia. For decades, the price of the Australian dollar stayed strong due to the export of materials such as coal, iron ore, and other commodities.

The data available on the economic health of a country can be of great use to traders. In Australia, decisions by the central bank, the Reserve Bank of Australia, can play a significant role in determining the value of the AUD.

Role of CAD

The Bank of Canada also plays its part in the value of the Canadian dollar. It enacts policies that try to promote economic and employment growth, although it hasn’t directly intervened in the currency since 1998.

Much like Australia, Canada is a large exporter of materials and commodities, such as wood, grain, minerals and petroleum. This is very often a factor in the growth of the Canadian dollar. Being so close to the US has strengthened the import/export industry in Canada and helps the currency maintain its position as a popular currency in the foreign exchange market.

How to trade AUD to Canadian dollar

As you may already know, trading via CFDs (contracts for difference) is one of the most popular approaches when dealing with currencies such as AUD and CAD. In these next two sections, we'll explain what a CFD actually is and why trading AUD to CAD using CFDs can be advantageous for traders and investors.

Traders from around the globe often favour using CFDs to trade the AUD/CAD pair. CFDs are a form of derivative trading and have proven to be extremely popular for dealing with currency pairs on the foreign exchange market.

Traders don't actually need to own the currencies themselves when trading using CFDs. All that's required is for a trader to speculate on which currency in the pair will rise and which will fall. Through careful research of the AUD to CAD exchange rate and a keen eye for economic and political reports, traders can form an opinion on which direction the pair may move, and take the appropriate position with CFDs.   

Why trade AUD/CAD CFDs with Capital.com?

Advanced AI technology at its core: A Facebook-like news feed provides users with personalised and unique content depending on their preferences. If a trader makes decisions based on biases, the innovative News Feed offers a range of materials to put him back on the right track. The neural network analyses in-app behaviour and recommends videos, articles, news to polish your investment strategy.

Trading on margin: Providing trading on margin (30:1 for forex pairs), Capital.com gives you access to the AUD/CAD pair with the help of CFDs.

Trading the difference: By trading CFDs on AUD/CAD, you speculate on the rise or fall of its price. CFDs trading is no different from traditional trading in terms of its associated strategies. A CFD trader can go short or long, set stop and limit losses and apply trading scenarios that align with his or her objectives.

All-round trading analysis: The browser-based platform allows traders to shape their own market analysis and forecasts with sleek technical indicators. For instance, a trader could choose to have AUD/CAD analysis and forecasts as a big part of their feed. Capital.com provides live market updates and various chart formats, available on desktop, iOS, and Android.

Focus on safety: Capital.com puts a special emphasis on safety. Licensed by the FCA and CySEC, it complies with all regulations and ensures that its clients’ data security comes first. The company allows to withdraw money 24/7 and keeps traders’ funds across segregated bank accounts.

FAQs

For somebody new to the world of the foreign exchange market, it can seem like an intimidating place. However, once you've grasped the basics of trading on forex, it is actually quite similar to other markets. There are just a few key differences.

Given there is no central exchange and the market is traded between large financial institutions, the volumes can be huge in comparison to other markets. This actually lowers the overall cost to traders and makes entering and exiting trades much easier.

This is a question that many people ask when they're first getting to grips with how the market works. If you're used to traditional trading you might wonder what exactly is different here.

If you believe that the Australian dollar rates will rise and the Canadian dollar will fall, then by buying Australian Dollar / Canadian Dollar using CFDs you are buying into the AUD and selling the CAD.

A pip is merely the smallest increment of trade in the foreign exchange market. It stands for 'percentage in point.' AUD/CAD is quoted to two decimal points, so a pip is just the lowest amount that can possibly be added to (or subtracted from) this figure.

The simple answer is 'no' – Capital.com makes money through the bid-ask spread. This is different from traditional trading where a broker would normally earn commission on every buy and sell that the customer takes part in.

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