The USDCAD shows the relationship between the US dollar and the Canadian dollar. That's one of the most popular Forex pairs due to its high liquidity and predictable fluctuations that are easy to analyze.
Canada's strong economy also explains this asset's popularity. The Canadian dollar belongs to commodity currencies as the country exports huge volumes of gold and oil. So, the market of precious metals and the oil market have a significant impact on the CAD rate and the USDCAD pair in general.
The US dollar is the widest-spread currency in the world. The planet's economic reserves are mostly kept in USD. What's more, about 40% of global debt is denominated in US dollars. All these factors maintain a high demand for the USD. Its rate depends on many factors as US dollars are present almost in every sector of the global economy. The economy of Canada is deeply connected with the US one: the countries are top trading partners for each other.
One does not need to consider all the factors while making a forecast for the USDCAD pair. Paying attention to GDP, central bank policy, interest rates, and employment will be enough. Inflation data are particularly important. The Bank of Canada's inflation-control policy is one of the main factors in the USDCAD rate's fluctuations. The Governing Council of the Bank of Canada regularly adjusts monetary policy according to the consumer price index.
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