USD/CAD in one paragraph
USD/CAD measures how many Canadian dollars one US dollar buys. CAD is a commodity currency tied to crude oil because Canada is the world's fourth-largest oil producer and exports roughly 98% of its crude to the United States, so USD/CAD trades inversely to WTI most days. The medium-term trend is set by the 2-year Bank of Canada minus Federal Reserve yield spread. Typical daily range is 60 to 90 pips; BoC decisions or OPEC+ shocks can push 120-plus pip days.
Why USD/CAD? The Loonie, oil, and a shared border
USD is the world's reserve currency and the quote leg for over 88% of global FX turnover. CAD is the seventh most traded currency, and its real-economy story is unusually simple: Canada is the world's fourth-largest crude oil producer at roughly 4.8 million barrels per day, and roughly 98% of those barrels are exported by pipeline to a single customer, the United States. This makes CAD the closest thing in major FX to a direct claim on WTI crude.
That single trade relationship dominates the chart. When WTI rises, Canadian export revenues climb, dollars flow into Canada to pay for oil, and CAD strengthens, which pulls USD/CAD down. When WTI falls, the flow reverses and USD/CAD rises. The 60-day rolling correlation between USD/CAD and WTI has run between minus 0.5 and minus 0.8 for most of the last decade. It is one of the cleanest macro pairings in retail-accessible FX.
The nickname Loonie dates to 1987, when the Royal Canadian Mint replaced the $1 banknote with a gold-coloured coin featuring a common loon, the provincial bird of Ontario. Traders started calling the dollar the Loonie almost immediately, and the term stuck across the institutional desk. A 2-dollar coin issued in 1996 is called the Toonie by extension.
Quick fact. The price you see on USD/CAD is the number of Canadian dollars one US dollar costs. A quote of 1.3500 means $1 US buys $1.35 Canadian. Most majors are quoted to four decimal places, so the smallest tick on USD/CAD is 0.0001.
How USD/CAD pricing works
USD/CAD is a major FX pair quoted to four decimal places. A pip is the fourth decimal: a move from 1.3500 to 1.3501 is one pip. The fifth decimal you see on MT5 is a fractional pip (sometimes called a pipette), used by ECN feeds to price tighter than a full pip.
One standard lot of USD/CAD is 100,000 units of the base currency, USD. So 1.00 lot is exposure to $100,000 US. A mini lot (0.10) is $10,000, a micro lot (0.01) is $1,000. At 1:500 leverage, $100,000 of notional requires roughly $200 of margin.
Pip value on USD/CAD is denominated in the quote currency, CAD, then converted to your account currency. At a price of 1.3500, one pip on one standard lot is 10 CAD, which converts to roughly $7.41 USD ($10 divided by 1.3500). Pip value falls as USD/CAD rises and climbs as it falls, which is the opposite of EUR/USD where pip value is fixed at $10.
Spreads on USD/CAD are typically 0.0 to 0.3 pips raw on LHFX during overlap hours, widening to 1 to 2 pips during the thin late-Asia window. Commission on the Standard account is $3 per side per standard lot, $6 round-trip. Overnight swap is paid or received based on the rate differential between USD and CAD.
Worked example
You buy 0.10 lots of USD/CAD at 1.3500. Notional is $10,000 US, margin at 1:500 is about $20. Price moves to 1.3580, an 80-pip gain. Profit is 80 pips x $0.74 pip value = about $59. Round-trip commission on 0.10 lots is $0.60. Net P&L roughly $58. The same 80-pip move against you costs the same.
What moves USD/CAD
The pair has two dominant macro drivers, oil and the rate spread, layered over a handful of secondary catalysts. Most large daily moves trace back to one of the items below.
WTI crude oil (inverse)
The strongest single driver. Canada exports roughly 4 million barrels per day to the US, so every $5 swing in WTI shifts the Canadian trade balance materially. A 5% rally in WTI typically pulls USD/CAD down 40 to 80 pips over the following session. The Wednesday 10:30 AM ET EIA crude inventory report and OPEC+ meeting outcomes are scheduled high-impact events for USD/CAD.
Bank of Canada policy
The BoC announces rates eight times a year and is one of the more independent-minded G7 central banks, willing to move ahead of or against the Fed. Surprise BoC decisions routinely move USD/CAD 80 to 150 pips inside an hour. The quarterly Monetary Policy Report contains updated growth and inflation forecasts that traders parse closely.
Federal Reserve policy
The USD leg of the pair. FOMC decisions, the dot plot, and Jerome Powell press conferences move USD/CAD via the spread channel. A hawkish Fed surprise lifts USD/CAD; a dovish surprise drags it. Rate-decision Wednesdays at 2:00 PM ET are the highest-volatility scheduled windows.
US-Canada 2-year yield spread
The 2-year US Treasury yield minus the 2-year Canadian government bond yield is the cleanest medium-term USD/CAD signal. When the spread widens in favour of the US (US yields rising faster than Canadian), capital flows into USD assets and USD/CAD trends up. The 90-day correlation between the spread and USD/CAD typically runs above 0.7.
US-Canada trade policy
USMCA-related news, tariff threats on Canadian autos, steel, aluminium, lumber, or energy can produce sharp gaps. The pair gapped 200 pips on the original NAFTA renegotiation headlines in 2018. Trade-policy risk is unique to USD/CAD among majors because no other pair has this much single-counterparty trade dependence.
Commodity bloc moves
AUD, NZD, and NOK often move in the same direction as CAD on global risk-on or risk-off days. Watch AUD/USD and Brent crude as confirmation signals when you take a USD/CAD position. Divergence between commodity currencies usually flags an idiosyncratic Canadian story.
Global risk sentiment
USD/CAD is moderately risk-sensitive. CAD weakens during sharp risk-off events because oil falls and capital reaches for USD safety. The pair rarely moves as violently as USD/JPY or USD/CHF on risk shocks, but a sustained equity-market drawdown will usually lift USD/CAD 100 to 200 pips over a few sessions.
When does USD/CAD trade?
USD/CAD trades 24 hours a day from Sunday 5:00 PM ET to Friday 5:00 PM ET. Liquidity is concentrated in the New York session because both legs of the pair are North American currencies and most of the underlying flow (oil exports, cross-border M&A, USD-CAD funding) clears during US business hours.
Volatility is highest around US data prints (8:30 AM ET), the EIA crude inventory release (Wednesday 10:30 AM ET), and BoC or FOMC announcements. The London session is active but quieter than the US session.
Roughly 6:00 PM to 3:00 AM ET. Thin liquidity, narrow 15 to 25 pip ranges. Spreads widen on LHFX during this window. Avoid scalping unless an Asian session headline is in play.
Roughly 3:00 AM to 8:00 AM ET. Liquidity builds. European desks position ahead of the US open. UK and Eurozone data can produce knock-on moves via the EUR/CAD cross.
Roughly 8:00 AM to 12:00 PM ET. The most liquid window for USD/CAD. Canadian CPI, Canadian employment (first Friday of the month), and US NFP all print at 8:30 AM ET. EIA crude inventory hits at 10:30 AM ET Wednesday. Spreads tightest, ranges widest.
Roughly 12:00 PM to 5:00 PM ET. FOMC and BoC decisions land at 2:00 PM ET on rate-decision days. After 3:00 PM ET, liquidity thins quickly as US institutional desks square positions for the close.
Daily ranges of 60 to 90 pips are typical. BoC announcement days, FOMC days, and OPEC+ output decisions produce 120-plus pip ranges. Size down ahead of the 2:00 PM ET window on rate-decision days.
BoC vs Fed: how the cross-reaction plays
USD/CAD is a textbook two-central-bank pair. The medium-term direction is almost always a function of what the BoC is doing relative to the Fed. The four scenarios below cover most of the rate-driven price action.
BoC hikes, Fed on hold
Canadian yields rise faster than US yields, the 2-year spread narrows in favour of CAD, USD/CAD falls. Recent examples have produced 200 to 400 pip downtrends over 4 to 8 weeks following a hawkish BoC shift while the Fed sits.
BoC cuts, Fed on hold
Canadian yields drop, the spread widens in favour of the US, USD/CAD rises. The June 2024 BoC cut while the Fed held was the cleanest recent example, lifting USD/CAD 150 pips in 48 hours.
Fed hikes, BoC on hold
USD yields rise, spread widens in favour of the US, USD/CAD trends higher. The 2022 to 2023 Fed hiking cycle drove USD/CAD from 1.2400 to 1.3800 as the BoC paused earlier than the Fed.
Fed cuts, BoC on hold
USD yields drop, spread narrows in favour of CAD, USD/CAD falls. The market often pre-positions weeks ahead of confirmed Fed easing via OIS pricing, so the spot move can precede the decision.
Watch the divergence trade
The largest sustained USD/CAD moves happen when one bank shifts and the other does not. The first signal is usually a swap-curve repricing, visible in the 2-year spread before it shows up in spot. Build positions around confirmed policy divergence, not single data prints.
USD/CAD vs other CAD pairs
USD/CAD is the most liquid way to take a CAD view, but the cross-rates against EUR and JPY behave very differently because they layer a second non-USD economy onto the trade. The table below summarises the main differences.
| Pair | Primary driver | Typical daily range | Liquidity |
|---|---|---|---|
| USD/CAD | WTI crude + BoC/Fed spread | 60 to 90 pips | High, deepest CAD pair |
| EUR/CAD | ECB/BoC spread + EUR/USD | 70 to 110 pips | Moderate |
| CAD/JPY | Risk sentiment + WTI + BoJ | 60 to 100 pips | Moderate, risk-on proxy |
USD/CAD is the cleanest expression of an oil view or a BoC view. EUR/CAD trades the ECB-BoC spread but is dragged around by EUR/USD, so it is noisier. CAD/JPY behaves more like a risk-on proxy because the yen leg responds to global risk appetite. If your thesis is purely about Canada or oil, trade USD/CAD.
Trading USD/CAD at LHFX
LHFX offers USD/CAD on MetaTrader 5 with STP/ECN execution. Specifications are visible in MT5 under Market Watch, Symbols, USDCAD.
Up to 1:500 on USD/CAD. Experienced traders typically run 1:20 to 1:50 effective leverage to manage BoC and oil-shock risk.
$3 per side per standard lot ($6 round-trip) on the Standard account. Commission is the same across all majors.
MetaTrader 5 on Windows, Mac, web, iOS, and Android. LHFX is a direct MetaQuotes licensee.
STP/ECN. USD/CAD orders route to aggregated bank and non-bank liquidity. No dealing desk, no requotes on standard market orders.
Sunday 5:00 PM ET to Friday 5:00 PM ET. Spreads tightest during the 8:00 AM to 12:00 PM ET overlap window.
A worked sizing example
$1,000 account at USD/CAD 1.3500. You open 0.10 lots ($10,000 notional). Margin used is roughly $20 at 1:500. An 80-pip adverse move costs about $59, or 5.9% of account. That is on the high end of a sensible per-trade risk; 0.05 lots would put the same 80-pip loss at roughly 3% of account.
For the live spread snapshot and current contract specifications, see the USD/CAD instrument page. For commission and spread details across all instruments, see spreads and fees, and for the full leverage policy by instrument see leverage.
Risks of trading USD/CAD
USD/CAD is liquid and well-behaved on most days, but it carries a specific risk profile shaped by the oil and BoC linkages described above. Four risks deserve specific attention.
OPEC+ and oil-supply shocks
Unscheduled OPEC+ output decisions and Middle East supply disruptions can move WTI 5 to 10% in a single session, dragging USD/CAD 100 to 200 pips in minutes. The 2020 Saudi-Russia price war produced a 400-pip USD/CAD spike in a week. Stops set inside normal daily ranges can be skipped during oil gaps.
BoC surprise risk
The BoC has a long history of moving ahead of consensus, including unscheduled cuts and surprise hold-or-hike decisions. A surprise BoC move can produce a 100 to 150 pip range inside the announcement minute. Size down ahead of the 9:45 AM ET BoC announcement window and avoid holding large positions through the press conference 45 minutes later.
US-Canada trade headlines
Tariff threats on Canadian autos, steel, aluminium, lumber, or energy can produce headline-driven gaps of 50 to 200 pips. Unlike scheduled data, trade-policy headlines hit at unpredictable times, including weekends, which means standard stop-losses cannot protect a position against a Sunday-open gap.
Leverage amplifies both sides
At 1:500, a 0.2% adverse move wipes margin on that position. USD/CAD's typical daily range of 60 to 90 pips is around 0.5% of price, so a one-day adverse move at full leverage produces a multiple-of-margin loss. Risk per trade should be sized to account, not to the leverage cap.
Risk disclosure: CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. The vast majority of retail investor accounts lose money when trading CFDs. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money. Never trade with money you cannot afford to lose.