Canadian Dollar: Shorts jump despite recession – Rabobank

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."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)