Does the Canadian dollar have a bullish surprise up its sleeve?

12月6日

This is the question I am asking myself as we head into 2025. CAD has been the weakest major for some time now based on the BOC's easing cycle, and we saw a record level of net-short exposure against it in August, and another surge of shorts in November. This strikes me as a stale trade that is vulnerable to a shakeout, and it might not require a particularly large catalyst for CAD bears to capitulate and send USD/CAD lower.

MS

12月10日

交易开始

So far, not so good, with USD/CAD now teasing the YTD high ahead of the BOC meeting.

The Central Bank could cut rates by 50bp but then signal a slower pace of easing in 2025. And that could be the first step of a turnaround for CAD bulls. This idea needs more time to develop, but one I will revisit with revised levels in due course.

MS