AUDCAD definition

AUD/CAD expresses the value of the Australian dollar in Canadian dollars, or how many Canadian dollars one Aussie dollar will buy. It is a cross rate, traded directly rather than through the US dollar, and it pairs two of the major commodity currencies against each other. As a cross it offers decent but not top-tier liquidity, with spreads wider than the dollar majors, and it has no widely used nickname.

The Australian dollar is the base currency and the Canadian dollar the quote currency, so a quote of 0.9000 means one Australian dollar is worth 0.9000 Canadian dollars. A rising price means the Aussie is strengthening against the loonie, a falling price the reverse. You trade AUD/CAD as a forex CFD, taking a position on the price rather than exchanging currency outright: go long if you expect the Aussie to rise, short if you expect it to fall. Moves are counted in pips at the fourth decimal place, and your result is the pips gained or lost multiplied by your position size.

This pair is a tug-of-war between two commodity stories. The Australian dollar tracks iron ore and Chinese demand, while the Canadian dollar moves with crude oil, so the pair tends to climb when metals outperform energy and fall when oil leads. The relative stance of the Reserve Bank of Australia and the Bank of Canada sets the rate differential, and because both are risk-sensitive currencies the cross can stay range-bound when their drivers move in step.