Hedge Funds Pile on Short Canadian Dollar Positions Amid Tariff Fears

Hedge funds have turned increasingly bearish on the Canadian dollar due to ongoing concerns about American tariffs, leading to a significant increase in short positions. According to Commodity Futures Trading Commission data released last Friday, leveraged money managers held 99,823 contracts tied to wagers on a weaker CAD in the week ending July 21.

This is the largest amount of negative bets placed on the Canadian dollar since August 2024, with hedge funds piling on short positions as the threat of American tariffs weighs heavily on the currency. The data suggests that market participants are bracing for potential economic fallout from trade tensions between Canada and the US.