Canadian binary option
Economy of the CANADA : facts & statistics
|Nominal GDP||$1,303,200 million (2008)|
|GDP per capita||$39,182|
|Real GDP growth rate||2.53% (2014)|
|Inflation rate||1.90% (2014)|
|Unemployment rate||6.6% (December 2014)|
Top Binary Options Brokers in Canada
Understanding the Characteristics of Canadian Dollar
Canada is famous for abundant natural resources, such as gold, crude oil, coal and wood. The official currency, Canadian dollar, is thus influenced by the prices of natural resources. Compared with the Australian dollar, which is also a currency of a country wealthy in natural resources, the Canadian dollar is less affected by the prices of commodities. This is because that the services sector, such as, financial services, insurance, real estate, manufacturing and business services, plays an important role in the Canadian economy.
The developed countries tend to have a mounting debt. However, as one of the developed countries, Canada is the only country that has a fiscal surplus and trade surplus. Therefore, the Canadian dollar is perceived as a relatively stable and low risk currency.
The low interest rate in Canada serves as evidence for the stable and low risk currency. The Canada’s economic policy is well carried out and inflation is controlled. That is to say, there is no need to raise interest rate as the country’s economic conditions are good and there is no inflation.
However, as the United States’s geographic neighbor, Canada’s economy is tied to the United States. In recent years, the economic ties have deepened and exports to the US have made up 80% of all Canada’s exports. The Canada’s economy is thus not a little affected by the US economy.
The agriculture and energy industry in Canada are particularly affected by the US economy. If the US economy is in recession, it will take a heavy toll on Canada’s slowdown. Therefore, when you trade the Canadian dollar, it is necessary to look at the US economy.
List of Economic Indicators You Should Pay Attention To When Trading Canadian Dollar
|BOC Monetary Policy||8 times a year|
|Gross Domestic Product (GDP)||quarterly|
|Ivey Purchasing Managers Index||at the beginning of each month|
|Consumer Price Index||around the 20th of each month|
|Housing Starts||the 9th business day of each month|
|Unemployment Rate||the first Friday of each month|
|Employment Change||the first Friday of each month|
|International Merchandise Trade||around the 10th of each month|
|Retail Sales||the 9th business day of each month|
When you trade Canadian dollar, it is necessary to pay attention to the policy interest rate released 8 times per year by the Bank of Canada. You should also pay attention to the remarks of important person.
Low interest rate is a characteristic of the Canada’s policy interest rate. After the collapse of Lehman Brothers in 2008, the interest rate is 0.25%, and from the second half of 2010, it has been kept on hold at 1.0%. However, by comparing with the period before the collapse of Lehman Brothers when the interest rate is over 4%, the current interest rate is still low.
Canada has the second largest proven reserves of crude oil in the world following Saudi Arabia and its reserves make up 15% of world’s crude oil reserves. Canadian dollar is linked with the WTI oil price and it tends to rise when the crude oil prices rise.
In recent years, due to the Shale Gas Revolution, the oil price may have less impact on the value of currency. If alternative energy plays a bigger role, crude oil will become relatively less important. Canada has a substantial amount of shale gas reserves. Therefore, when the shale gas is an alternative to crude oil in Canada, other correlated resources will probably change. It is thus necessary to pay attention to this factor.
It is the same as Australian dollar, the Canadian dollar is not a currency with high liquidity. Even though there are some movements in the value of Canadian dollar, it is unlikely that a currency crisis will occur easily. Therefore, the Canadian dollar is perceived as a stable currency to be traded with.
Binary Options in Canada
On this website, we will introduce a list of best binary options brokers for Canadian residents. Since the payout rates and trading details of brokers are different from one another, it is better to choose the right broker for your purpose.
Most popular brokers for Canadian traders
What You Should Pay Attention To When Trading Canadian Dollar
As it is mentioned above, the value of Canadian dollar is influenced by the US economy and crude oil price. Since the Canadian dollar can also be influenced by the prices of other commodities, it is also necessary to pay attention to commodities, such as gold and minerals.
It is well known for those investors who are experienced in foreign exchange margin trading that the movements of Swiss franc are similar to those of the Euro. This is the same for the U.S. dollar and Canadian dollar. While trading the Canadian dollar, it is necessary to pay attention to the movements of the U.S. dollar.
Investors tend to buy the Canadian dollar in recent years. The Canadian dollar is considered as a safe-haven currency when the markets in the U.S. are volatile.By just looking at the fact that the currency has low liquidity and low interest differentials, it will not draw people’s attention.
However, due to the low level of liquidity, it is very likely that there will be large movements in the value of Canadian dollar when big events occur suddenly. Compared with the U.S. dollar, the Canadian dollar is less likely to be influenced by the political risks. However, it is still necessary to pay attention to the economic indicators and the release of interest rates.
Changes in policy interest rate of the Canada