How can you trade the AUD/CAD?
There are 3 popular methods of trading this currency pair, which are the following:
Banks and financial institutions. Banks have been the go-to option for trading on the global market for many years, but their prestige and experience come at a price. Most of them are not able to provide traders with the flexibility they seek.
Online Brokerages. Web based brokers like CMTrading have the ability to offer their clients the opportunity to access the markets via cutting edge trading platforms with advanced trading tools. At CMTrading, we adhere to the strict regulatory guidelines set by the FSCA in South Africa, so you know your funds are safe with us.
While traders can choose to trade futures and options when trading an asset, this level of speculation requires more knowledge and experience than the average trader may possess.
What factors influence the AUD/CAD?
Both Australia and Canada’s economic calendars are full of influential events, so traders would be wise to track the calendars ahead of time. While the results in either direction set the tone for a rise or drop in the currencies’ market value, it is up to the trader to determine which events will influence the most.
In addition, Australia and Canada’s central banks play a major role in influencing the fluctuation of this currency pair. The banks’ interest rates announcements can heavily impact the pair’s next move.
What to consider when trading the AUD/CAD
The AUD/CAD pair can be traded in both short and long term positions. Though there is profit to be made in short term positions, the longevity and stability of each of its respective economies make it an attractive option to forex traders.
Those looking to diversify while keeping risk to a minimum can also add this pair to their portfolios, especially if they are heavily invested in commodities and stocks.
Did you know?
The first Australian dollar was introduced back in February 1966, replacing its predecessor the Australian pound. Nowadays, this currency has earned the nickname “Aussie”.
Traders are often drawn to trading this currency for a number of reasons, be they the high interest rates in Australia, the relative freedom of government intervention, the stability of the Australian economy and politics, or the diversification potential due to Asian markets and the commodity cycle.
The Australian currency can also be traded against the US dollar, New Zealand dollar, and the Japanese yen.