AUD/CAD is a so-called commodity currency pair that consists of the Australian dollar and the Canadian dollar. Both economies are heavily reliant on commodity prices around the world. While Australia is the world's biggest exporter of iron ore, coal and aluminium oxide and one of the biggest exporters of petroleum gas and gold, Canada depends on its exports of crude oil, gold, sawn wood and raw aluminium. Any major price fluctuations of those commodities may result in the pair's rise or decline, depending on which economy suffers most.
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 Canada. The Australian economy is more diversified in terms of trade partners which include China and a number of countries in Southeast Asia.
Other factors affecting the AUD/CAD rate include general economic indicators, such as unemployment rates, inflation data and GDP, and the central bank decisions regarding the interest rates in both countries.
Traders and investors interested in the AUD/CAD currency pair, should consider geopolitical factors, such as trade wars between China, United States or Russia — Saudi Arabia oil tensions and other conflicts that may impact commodity prices.
Risk warning: Trading in FX and CFDs entails high risk of losing capital.
