Speculative short positions against the Canadian dollar surged to the highest level among major currencies in the period leading up to a U.S. tariff announcement, according to weekly Commodity Futures Trading Commission data released on Friday.
The CFTC figures showed net short positions held by non-commercial accounts in the Canadian dollar totaled $12.5 billion. That figure represented both the largest net short for any currency traded on the Chicago Mercantile Exchange for a second week in a row and the most substantial net short recorded in the loonie since December 2024.
In currency markets, the loonie weakened to 1.4248 per U.S. dollar, equivalent to 70.19 U.S. cents, last month. That level marked the Canadian dollar's weakest reading since April 2025. Since the U.S. tariff announcement, the currency has steadied in the vicinity of 1.41 per dollar as gains in oil prices have partially offset the heightened trade uncertainty.
U.S. President Donald Trump announced new tariffs on Canada that will take effect on August 19. The measures include a 50% tariff applied to a broad set of goods. The CFTC data covered a period prior to that announcement.
Separately, the U.S. decision not to extend the U.S.-Mexico-Canada Agreement has begun a process described as a decade-long wind-down of the trade deal. That move places pressure on both Mexico and Canada to pursue bilateral arrangements with the United States.
Market context and immediate effects
Short positions reaching $12.5 billion signal elevated speculative bearishness toward the Canadian dollar in futures markets. The loonie's trough near 1.4248 per dollar reflected those positioning trends, while the subsequent stabilization near 1.41 coincided with a rebound in oil prices that helped offset some of the market's trade-related anxieties.
What remains clear
- Speculative net shorts in the loonie rose to $12.5 billion, the largest on the CME for any currency for a second straight week.
- The loonie recorded its weakest level since April 2025 at 1.4248 per U.S. dollar.
- Higher oil prices have provided a partial counterweight to trade uncertainty, helping the currency stabilize near 1.41 after the tariff announcement.