AUDUSD and USDCAD May Be Related to Each Other
If you are a currency trader, you would have come across the idea of AUDUSD, USDCAD and NZDUSD and you may be wondering whether these currencies are related to each other. Let us find out how these three pairs can be connected to each other.
The general consensus among investors is that the Australian Dollar and the US Dollar are not linked together. They believe that AUDUSD and USDCAD have been created to be two different pairs. These are quite correct, because these are two very different pairs.
In fact, the US Dollar can be termed as the biggest industrialised country in the world. It also has the highest GDP per capita, so it is not surprising that its currency should be strong. On the other hand, Australia is a small economy compared to US, but it has the largest economy in terms of GDP per capita.
In case of AUDUSD and USDCAD, the local currency is strong against the Euro, which is slightly weaker against the US Dollar. Although the same is not true about EURUSD and NZDUSD. The Australian Dollar and the US Dollar are considered as strong global currency. In case of AUDUSD and USDCAD, it is quite weak, so it has some relevance.
If we take a look at the number of AUDUSD and USDCAD daily trading, the value of the local currency has gone up due to the appreciation of the US Dollar. This has been a positive sign for the future of the AUDUSD and USDCAD.
Now let us take a look at the Euro and the UK Pound. The Euro is considered as the strongest of all the currencies because it is a common currency in most of the European countries. On the other hand, the British Pound is the weakest of all the currencies as it is not freely floating like the Euro.
So, if the Euro appreciated against the USD, the value of the UK Pound will also go up. The only problem with this scenario is that there is a possibility that the Euro will depreciate again against the USD.
At present, the Euro is stronger than the USD and the GBP. The EURUSD and GBPUSD are a currency pair that has recently created by the two major central banks in Europe. Hence, it can be considered as a bullish factor.
If the Euro depreciates, the AUDUSD and USDCAD will appreciate. AUDUSD and USDCAD have been gaining ground because of the increasing appreciation of the Euro against the USD. This is because of the fact that the Euro is a fairly strong global currency compared to the US Dollar.
If the Euro depreciates against the USD, then the AUDUSD and USDCAD will be affected. In such a scenario, the EURUSD and GBPUSD will be affected and the AUDUSD and USDCAD will go down.
In other words, the Euro can be regarded as a very strong currency that is constantly on the rise. This has been the main reason for the increase in AUDUSD and USDCAD.
You can make money by trading these pairs if you wish to earn and if you have a local currency that has increased in value against the Euro. So, trade these pairs now!