NZDCAD definition

NZD/CAD sets the New Zealand dollar against the Canadian dollar, telling you how many Canadian dollars one New Zealand dollar is worth. It is an unusual cross in that it pits two commodity currencies against each other, one tied to soft commodities and the other to oil, and it trades thinly enough that spreads are wider than on the majors. The pair has no established nickname.

The New Zealand dollar is the base currency and the Canadian dollar the quote currency, so a quote of 0.8300 means one New Zealand dollar buys 0.8300 Canadian dollars. When the price climbs the New Zealand dollar is the stronger of the two; when it drops the Canadian dollar has the upper hand. You trade NZD/CAD as a forex CFD, speculating on the rate rather than holding the cash: go long if you back the New Zealand dollar, short if you back the Canadian dollar. Pips fall on the fourth decimal place, and your profit or loss equals the pips moved multiplied by your position size.

What moves NZD/CAD most is the relative pull of the two commodities behind each currency: dairy and agricultural prices for the New Zealand dollar, crude oil for the Canadian dollar. When oil rallies harder than soft commodities the pair tends to fall, and the reverse holds when dairy leads. The rate paths of the Reserve Bank of New Zealand and the Bank of Canada set the slower-moving backdrop.