As you may know, crude oil is also called “black gold” or what we like to call “black cocaine”.
A person can have no gold, but if you have a drug addiction, you cannot do without cocaine.
Petroleum is a drug that flows in the global economic vein as the main energy source of the global economy.
Canada, one of the world’s largest oil producers, exports about 2 million barrels of oil to the United States every day. This makes it the largest oil supplier in the United States.
This means that Canada is the leading distributor of black cocaine in the United States.
Due to the huge amount, the United States needs a large amount of Canadian dollars to purchase.
Similarly, it should be noted that Canada’s economy is dependent on exports, and 85% of its total exports are directed to its southern brother, the United States, so the dollar/Canadian dollar trend may be strongly affected by U.S. consumers’ response to changes in oil prices. .
If US demand rises, manufacturers must order more oil to meet demand. This will lead to higher oil prices and lower USD/CAD.
If demand in the US declines, manufacturers will reduce demand because they do not need to produce more products. Demand for oil may decline, and it may hit demand for Canadian dollars.
Therefore, the next time you refuel your car, if you see a rise in fuel prices, you can take advantage of this information. It may mean that you have to short USD/CAD.