Canadian Dollar Slumps to Record Short Position Amid US Tariff Threat

Speculators have taken bearish positions on the Canadian dollar to unprecedented levels, pushing it past the Japanese yen as the world's most-shorted currency. According to data from the Commodity Futures Trading Commission, net short positions held by non-commercial accounts reached $12.5 billion in the latest weekly update.

This is the highest level of bearish bets on any major currency traded on the Chicago Mercantile Exchange for a second straight week and marks the largest net short position in the loonie since December 2024.

The Canadian dollar touched its weakest level against the US dollar at 1.43 last month, its lowest point since April 2025. However, it has steadied near 1.41 after President Donald Trump announced new tariffs on Canada, which may have offset some of the trade uncertainty.

Trump's decision not to extend the US-Mexico-Canada Agreement has started a decade-long clock to wind down the trade deal and is pressuring Mexico and Canada to reach bilateral deals with the US.