Loonie Slumps Amid Record Hedge Fund Short Bets and Tariff Threats

The Canadian dollar has been underperforming its major peers this year due to a sluggish economy and an unfavorable interest-rate differential with the US.

Data from the Commodity Futures Trading Commission revealed that hedge funds held 99,823 short contracts against the loonie for the week ending July 21, marking the largest concentration of negative bets since August 2024.

The Canadian dollar weakened to near two-week lows around C$1.4114 per US dollar as American tariff threats and sharp declines in global crude oil prices weighed on the energy-linked currency.