EURCAD definition

EUR/CAD is the exchange rate between the euro and the Canadian dollar, showing how many Canadian dollars one euro will buy. It is a cross pair that sidesteps the US dollar, blending a major European currency with a commodity-linked North American one. Liquidity is decent but spreads are wider than on EUR/USD.

The euro is the base currency and the Canadian dollar the quote currency, so a quote of 1.4700 means one euro buys 1.4700 Canadian dollars. A rising price means the euro is strengthening against the loonie, a falling price the reverse. You trade EUR/CAD as a forex CFD, taking a view on the rate rather than exchanging cash: go long if you expect the euro to rise, short if you expect it to fall. A pip is the fourth decimal place, and your profit or loss equals the pips moved multiplied by the size of your position.

EUR/CAD is a tug-of-war between two central banks, the European Central Bank and the Bank of Canada, so the rate-policy gap between them is the first thing to watch. The second is crude oil: Canada is a major oil exporter, and a stronger oil price tends to lift the loonie and pull the pair lower, while weak oil does the opposite. Eurozone growth and inflation supply the other side of the equation.