Loonie Sinks Under Tariff Pressure

Traders have been betting against the Canadian dollar, also known as the loonie, in the wake of US President Donald Trump's announcement to impose fresh 50 per cent tariffs on certain Canadian goods. The tariffs have led to increased shorting of the loonie, with the currency overtaking the Japanese Yen as the most heavily-shorted currency according to data from the US Commodity Futures Trading Commission.

The increase in shorting is a result of traders' negative expectations for the Canadian economy following the tariff announcement. The loonie has been affected by this sentiment, bringing it to its most negative bets in two years.