Commodity Currency Pairs Comparison – EURUSD Vs USDCAD
The best day to day exchange rate to trade the forex currency market depends on which currency pairs are most heavily traded at any given time of day. For simplicity’s sake, the analysis that will be shared here will only consider the best day to day exchange rate to trade these popular currency pairs; the others will be considered in their own merit. The first thing to consider is how liquid the currency in question is. Liquidity simply means that it is easy to trade.
One currency in particular that is very liquid in the Canadian Dollar is the Canadian dollar. The CAD is traded very easily, so much so that many people will tell you that they have experienced their best trade of the year in Canada when trading the USD. The same thing can be said for the Bank of Canada (BC) and the Canadian dollar. The Bank of Canada (BC) has been a major force in the Canadian dollar since its introduction into the floating exchange rate market in February, 2021. This is especially true when one considers that Canada is currently one of the most volatile economies in the world and the Bank of Canada is in a constant state of flux with dozens of economists having dissertations written to try and explain the intricacies of their economic policies and actions.
Also worth mentioning in the discussion is the Euro, also known as the EURUSD. The EURUSD has been a major force in Europe ever since the introduction of the euro, and is still a strong force today. The history of trading the EURUSD mirrors that of the AUDUSD in that it was very hard to trade the currency due to extreme moves in the American dollar and a lack of confidence in the euro as a whole due to worries about the possibility of an impending financial crisis. In August of 2021, doubts were deepened when the European Central Bank decided to buy EURUSD by buying 100 billion shares of common stock in the Frankfurt Stock Exchange (EGX). This decision did not go down well with the United States, which began to think that this was an attempt by the central banks of other countries to weaken the strength of the euro in the markets.
The next most significant currency pair is the AUDUSD/USDCAD. This is the most widely traded of all the major currency pairs in Australia. The reason for this is that this is a safe haven for investors seeking to hedge against the US dollar or to trade the currency pair against another major currency pair such as the GBP. One of the most powerful forces in the Australian economy is the property market, where the demand for properties is outstripping the supply, causing prices to appreciate sharply every month. This is a great place for investors to make money, although the recent interest rate hike by the Federal Reserve has made it difficult for investors to secure returns.
The next most significant currency pair is the AUDUSD/ NZD or the AUSUSD/NZD. This is an ideal place for investors who are expecting the AUSUSD to depreciate in the future because the EURUSD has been strengthening versus the dollar against many major currencies. However, the recent economic and political situation in New Zealand has resulted in a weakening of the AUSUSD versus the euro. The relative strength of the euro is supported by the fact that there are many economies similar to New Zealand’s that is experiencing similar economic problems, including the current recession in Italy and the economic decline in the United Kingdom. If you are looking to buy the AUSUSD to protect against the EURUSD and similar currencies, then this is the spot to get in. The problem is that this form of protection is currently unavailable due to the weak euro.
The most recent economic indicators indicate that the EURUSD may continue to weaken versus the US dollar. The recent announcement by the Bank of England that it will be increasing interest rates may have a negative effect on the AUSUSD. There are other similar indicators that indicate a possible depreciation in the US Dollar and the EURUSD. If you have bought the AUSUSD and think that it is undervalued, then it may be because you are not aware of the latest developments. The guru’s site provides quotes from around the world. When you use the quotes on this site, you get an idea of where the different currencies are based on their relative strength.
To determine the relative strength of the EURUSD and the AUSUSD you need to look at the performance of the two currency pairs in the last few years. When we look at the EURUSD versus the US dollar, then we find that there has been a consistent movement in the markets each month. In addition, when you look at the AUSUSD versus the euro, you see a downward trend over the past couple of years. The market has been consolidating with the euro reaching a high over the past year, and now the market is looking to reverse this trend and reverse the trend in the US dollar. So, it is very important for investors to know whether or not the EURUSD is overvalued or undervalued.
In addition, if you consider commodity currency pairs such as the Canadian dollar and the Australian dollar, then you can consider the EURUSD and the USDCAD as overvalued, and the USD and the CANADA by the Australian dollar as undervalued. However, when you consider the AUSUSD and the euro, then they are considered to be in a converging direction. Therefore, when these pairs are added together, they make up a powerful combination. When looking at the USDCAD and the Canadian dollar, you see a downward trend for the USDCAD, and a consistent upward trend for the Canadian dollar. So, this makes the EURUSD the more highly correlated than the other commodity currency pairs that are compared to the AUSUSD. This may sound like doom and gloom, but if you keep your eye on the facts, then the USDCAD and the Canadian dollar are not showing any signs of weakening and will instead continue to rise, while the EURUSD continues to weaken.