Why have CAD short positions hit record high?

19 ביוני

Net short position in the Canadian dollar is at their largest since data collection began in 1986. As of June 11, non-commercial accounts increased their net short positions in the Canadian dollar to 129,493 contracts, up from 91,639 the previous week, data from LSEG and the U.S. Commodity Futures Trading Commission showed

The Bank of Canada (BoC) become the first G7 central bank to start cutting interest rate this month. The central bank’s members deliberated postponing the rate cut until July but ultimately opted for an early reduction of 25 basis points (bps), according to the bank's meeting minutes.

In April, Canada’s inflation rate reached 2.7%. The BoC will have two more inflation reports before its next scheduled interest rate decision on July 24, with the first report due next Tuesday.

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Market expectations suggest a further 57 bps of rate cuts by year-end, contingent on inflation forecasts holding correct.

Traders are also closely monitoring the housing market's response to lower interest rates and evaluating the economic impact of rapid population growth, which surpassed 41 million as of April 1, according to Statistics Canada. The country’s population is growing by approximately 80,000 people per month.