The euro against the Canadian dollar represents the currency of the one-of-a-kind monetary union with a diversified economy and the official currency of Canada, a major commodity exporter. The EUR/CAD pair is more volatile than most major currency pairs and is therefore more attractive to intraday traders.
The euro is the official currency of most member states of the European Union. The eurozone, as the group of European states using the euro is known, includes approximately 350 million people and has a diversified and complex economy. The euro is popular with Forex traders. It is the second-most traded currency in the world after the U.S. dollar. Any major crisis in one or several member states of the European Union will affect the rate of the euro. When conducting a fundamental analysis of the currency, the economic indicators of Germany, France, Italy and Spain should be considered first as having the most weight in the eurozone economy.
The Canadian dollar is the official currency of Canada. The country depends on its exports of crude oil, gold, sawn wood and raw aluminium. Any major price fluctuations of those commodities may result in the currency's rise or decline. The Canadian economy depends on the U.S. because it is the largest export market and the country most imports come from. Any severe blow for the U.S. economy will therefore affect the Canadian dollar.
Factors affecting the EUR/CAD rate include general economic indicators, such as information on employment, inflation data, retail sales, industrial production, trade balance and the release of GDP data, as well as the central bank decisions regarding the interest rates in the Eurozone and Canada. Political events, natural disasters and various government policies can impact the EUR/CAD exchange rate significantly.
Risk warning: Trading in FX and CFDs entails high risk of losing capital.
