Loonie

• In forex, the ‘Loonie’ is a nickname for the US dollar vs Canadian dollar (USDCAD) currency pair.
• It’s derived from Canada’s $1 coin, which has a picture of a common loon (a bird) on the back side.
• USDCAD is a major currency pair and is heavily traded by both traders and institutions all over the world.

The USDCAD market typically shows a negative correlation with other US based currency pairs such as the EURUSD, GBPUSD and AUDUSD, and is one of the most liquid currency pairs in the forex market.

Both USD and CAD are also known as a petrocurrency, which means that they are the currencies of oil producing nations.

Source: xStation

In the example above, the green and red bars represent the Loonie, while the white and blue bars represent Oil. As you can see, the USDCAD is negatively correlated with Oil, meaning a rising oil price would typically mean a falling USDCAD rate. If we were to flip the Oil chart, however, then both markets would behave very similarly:

Source: xStation