Canadian Dollar

The Canadian Dollar is under pressure, ranking #6 of eight with a score of -20. Interest rates are the main headwind. At around 2.3%, the Canadian Dollar pays far less than higher-yielding peers like the dollar or pound, which makes it less attractive to carry-seeking capital. Positioning is a clear headwind — speculative futures traders are heavily net-short the Canadian Dollar, among the most bearish readings in years. That adds selling pressure, though such crowded shorts can snap back quickly. Broader risk appetite is positive, which helps the Canadian Dollar. As a currency tied to global growth and trade activity, it tends to strengthen when investors feel confident and weaken when they retreat to safety. Commodity prices are a modest headwind, with oil softening somewhat. Growth momentum has faded slightly, with the labour market showing early signs of cooling. The trend is negative — the score has dropped 9 points over recent weeks. On a valuation basis, it looks cheap versus its own one-year range, which may help cushion the downside from here.