Hedge funds' bearish bets on the Canadian dollar reached their highest level in two years due to the threat of additional tariffs imposed by the US and the continued escalation of trade tension between the US and Canada. According to the latest data from the US Commodity Futures Trading Commission, net short positions in Canadian dollars held by leveraged fund managers increased to 99,823 contracts in the week ending July 21, the highest since August 2024. Against the backdrop of intensifying trade frictions, the Canadian dollar is experiencing its worst weekly performance in five weeks. The Canadian dollar fell by a cumulative total of 0.5% against the US dollar this week, and market pessimism has increased markedly. Earlier this week, the Trump administration announced a 50% tariff on some Canadian goods in response to Canada's trade restrictions on US alcohol, automobiles, and dairy products. This move further increased the pressure on the Canadian dollar to depreciate. Since this year, the Canadian dollar's performance has continued to lag behind most major currencies due to weak Canadian domestic economy and unfavorable interest rate spreads between the US and Canada. As trade uncertainty rises, negative market expectations for the Canadian dollar are still fermenting.

Hedge funds' bearish bets on the Canadian dollar reached their highest level in two years due to the threat of additional tariffs imposed by the US and the continued escalation of trade tension between the US and Canada. According to the latest data from the US Commodity Futures Trading Commission, net short positions in Canadian dollars held by leveraged fund managers increased to 99,823 contracts in the week ending July 21, the highest since August 2024. Against the backdrop of intensifying trade frictions, the Canadian dollar is experiencing its worst weekly performance in five weeks. The Canadian dollar fell by a cumulative total of 0.5% against the US dollar this week, and market pessimism has increased markedly. Earlier this week, the Trump administration announced a 50% tariff on some Canadian goods in response to Canada's trade restrictions on US alcohol, automobiles, and dairy products. This move further increased the pressure on the Canadian dollar to depreciate. Since this year, the Canadian dollar's performance has continued to lag behind most major currencies due to weak Canadian domestic economy and unfavorable interest rate spreads between the US and Canada. As trade uncertainty rises, negative market expectations for the Canadian dollar are still fermenting.