Nothing infuriates Canadians more than the sense Americans are ignoring them. This indignation is justifiable in light of the importance of the U.S.-Canada bilateral trade flow; each country is the others largest trading partner. The Canadian dollar (CAD) is an important financial variable, too. Not only does it account for 9.1 percent of the benchmark dollar index (DXY), but it occupies a unique role therein. None of the five other currencies in the DXY can claim the CADs combination of dependence on cross-border trade and investment flows and interest-rate differentials and commodity linkages. Once we understand what drives the CAD, we have a critical piece in place for understanding the DXY.