Taking up most of the North America, half covered in snow Canada is based upon ten provinces and three territories. Queen Elizabeth reigns over the area while Governor General Michelle Jean represents her there.
This stretch of land between the Atlantic and Pacific Ocean is one of the most developed countries of the world. It is accredited for bringing to the face of earth basketball, maple syrup, smarties and baseball-our absolute favorites. For being economically so strong Canada’s currency CAD is important to the Forex world.
Financial Policy
The financial policy of Canada is determined by BOC- Bank of Canada. The basic aim of the policy designed by it is to make the Canadian dollar stable and do not let the inflation rate exceed 1-3%. BOC does that by adjustment of the bank rate (interest rate at bank is referred to as the bank rate) and through market operations.
BOC implements its open market operations by using a method called Large Value Transfer system. Banks all over Canada can borrow and lend money to each other, so that they go about their daily operations. BOC controls the interest rate on the lent money and so the economy also stays in its control.
Canadian Dollar
Loonie – Canada’s national bird is engraved on these coins. Its value follows that of oil and increases in very tight ranges. Its rises and falls with the U.S dollars. The CAD moves during U.S trading sessions around 1 pm but offers little movement during Asian and morning European trading sessions.
Economic Overview
Canada’s economy is based upon its natural resources significant of which are gold and black crack. According to IMF Canada’s economy is the 8th largest in the world. Despite having a strong industry, 70% of the country’s GDP is derived from the service sector. Most of the Canadian population is also involved in the service sector.
A major boost to the economy was provided by free trade agreement between U.S and Canada in 1989
Economic Indicators
CPI: Consumer price index keeps in record the rise and fall of the prices of consumer goods and services. Its report is watched over by currency traders.
GDP: Gross domestic product is the broadest measure of Canada’s economic activity. It reveals if the country is developing or not.
Trade balance: Economy is always affected by import and export activities of the country.
PMI: Ivey purchasing managers index is a survey designed to see whether a business is good or bad to the overall economy.
What moves the CAD
U.S Economic data usually prints at the same time as Canadian data. If the U.S data is negative and Canadian is positive, there is a massive drop in USD/CAD’s value. But id Canada’s is negative and U.S’s is positive, the value soars high.
