how do higher gas prices affect USD/CAD

May I ask how a change in the global price of gas is going to affect the USD/CAD currency pair? Many thanks!

C
@cahaya_dewan - 4 months ago

Higher gas prices will cause the USD/CAD exchange rate to drop because the U.S. consumes a lot of gas from Canada which they must pay for by converting the USD to CAD thus increasing demand for CAD and making it stronger. When the USD/CAD rate drops, it will cost less CAD to buy one USD, in other words the CAD has strengthened over the USD.