Why is the EUR/CAD an important market?
The currency pairing of euro-Canadian dollar is a popular pair to trade in the foreign exchange market, representing a significant share of daily trading. It's a pairing which is popular amongst veteran traders and newcomers alike.
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EUR/CAD trading hours
The foreign exchange market is open 24 hours a day, but UK trading specifically tends to become active around 8:00 AM, before tapering off from 5:00 PM. Throughout the day there will be times when there will be higher volumes of EUR CAD investing – this usually occurs around the same time as major market announcements.
History of EUR/CAD
The pairing of Euro-Canadian Dollar (EUR/CAD rate) has proven itself to be a popular partnership over the years, despite only existing as a pairing since the end of the 20th century. In this section, we're going to explore the history behind these two currencies.
The euro itself was first envisioned way back at the beginning of the 20th century, however, it wasn't fully realised until the end of the century. First, as a purely digital currency, and then as physical notes and coins. This common currency for a large proportion of Europe quickly gained traction and became cemented as a market leader. Trading in the euro swiftly developed into a new and exciting financial possibility.
When it comes to the Canadian dollar, 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. The Canadian dollar was rolled out in the 1850s.
Factors influencing the EUR/CAD
Role of EUR
Interest rates play a major part in the oscillation of the EUR CAD exchange rate. Therefore, the European Central Bank (ECB) is one of the major bodies which investors and traders will pay close attention to when making decisions. The ECB releases monthly reports concerning rates and rate statements, which are used as indicators about possible future policy direction.
Another factor that is considered is employment numbers, which are readily available to view. Consolidated employment numbers for the region impact the pair greatly and can be a vital source of information for investors and traders.
Role of CAD
The Bank of Canada is a major influencer of 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.
Canada is a large exporter of materials and commodities, such as wood, grain, minerals, petroleum etc.. Being so close to the US has strengthened the import/export industry in Canada and has helped the currency maintain a stronghold in the foreign exchange market.
How to trade EUR/CAD CFDs
An individual can trade EUR/CAD with either a forex contract or alternatively, they can trade a contract for difference (CFD) on a particular currency pair, and speculate on the price difference.
A CFD is a financial instrument typically between a broker and an investor, where one party agrees to pay the other the difference in the value of a security, between the start and end of the trade. You can either hold a long position (speculating that the price will go up) or a short position (speculating that the price will fall). This is considered a short-term investment or trade as CFDs tend to be used within a limited timeframe.
Trade Euro / Canadian dollar CFD
For instance, to trade the EUR/CAD currency pair using CFDs, you speculate on the direction of the underlying asset. If you think the euro will appreciate then take a long position by buying the CFDs. If you think the euro will lose value against the Canadian dollar then you would take a short position by selling CFDs.
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Why trade EUR/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 SmartFeed 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 (20:1 for non-major forex pairs), Capital.com gives you access to the EUR/CAD pair with the help of CFDs.
Trading the difference: by trading CFDs on EUR/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 EUR/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: Captal.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.
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, trading on Forex is actually quite similar to other markets. There are just a few key differences.
Because there is no central exchange and it is a market driven by the world’s large financial institutions, the volumes can be huge in comparison to other markets. Not only does this lower the overall cost to traders but it also makes entering and exiting trades easy.
A pip is merely the smallest increment of trade in the foreign exchange market. It stands for 'percentage in point.' GBP/JPY 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' – we at Capital.com make money through the bid-ask spread. This is different from traditional trading where a broker would earn commission on every buy and sell that the customer takes part in.