Previously we discussed the relationship between the price of gold and AUD / USD and USD / CHF. And now we will discuss the relationship between oil prices (oil) with USD / CAD.
Need to be reminded again that we can live without having to have gold, but if we do not have crude oil or crude oil, then we will certainly find it difficult to do activities in this life.
Crude oil is often referred to as black gold (usually the name is golden yellow, bro) and I can also say that black gold at the moment is what drives the world (unless later other energy sources are found, bro :)).
Canada is one of the largest crude oil producers in the world, selling oil nearly 2 million barrels per day to the US. And this is what makes it the largest US oil supplier.
Because this transaction involves a very large volume, it will create a demand for the Canadian (CAD) currency that is so large.
From this we can note that Canada’s economy is very dependent on its export activities with almost 85% of its exports being carried out to the US. Therefore the price of the USD / CAD currency pair is very dependent on how US consumer consumers react with changes in oil prices.
If US demand rises, the producers will increase their production so that they need a lot of energy (oil) so that the price of oil rises which allows it to cause USD / CAD prices to fall.
If US demand falls, the producers will reduce their production so that the need for energy (Oil) will drop which will then cause the oil price to fall which allows the price of USD / CAD to rise.
Oil prices have a negative relationship with USD / CAD!
When the price of oil rises, the price of USD / CAD falls and when the price of oil falls, the price of USD / CAD rises.
If you don’t have a forex trading platform but want to know the development of oil prices and other commodities, please visit the Bloomberg website. And there you can analyze well why fluctuations in commodity prices can occur.