Rabobank strategists Molly Schwartz and Jane Foley report that Canadian Dollar (CAD) net short positions have surged about 36% to their highest level since December 2025.
The Canadian Dollar was the second-worst performing G10 currency in May, as Q1 Gross Domestic Product (GDP) slipped to -0.1% q/q annualized, signaling a technical recession
Nevertheless, markets still price around 1.25 Bank of Canada (BoC) hikes by year end. Loonie pressured but hikes still priced “CAD net short positions jumped by around 36% to the highest level since December 2025.” “CAD was the second-to-worst performing G10 currency in May.” “Canadian Q1 GDP registered a slip to -0.1% q/q annualized, marking a technical recession.” “However, the market is still pricing in around 1.25 BoC hikes by year end.” Author