The Canadian dollar (commonly known as the ‘loonie’) weakened to a 2-month low against its U.S. counterpart on Monday, 8 June ’26. This decline was while investors awaited a Bank of Canada (BoC) policy decision this week. This decline followed recent data indicating that speculators were increasing their bearish bets on the currency.
The loonie was trading 0.1% lower at 1.3950 for each U.S. dollar, or 71.68 U.S. cents. This was after touching its weakest intraday level since 31 March at 1.3961.
Bearish bets by spectators on the Canadian dollar rose to the highest level since December ’25. This is based on data from the U.S. Commodity Futures Trading Commission, reflected on Friday, 5 June ’26. Non-commercial net short positions stood at 94,111 contracts as of Tuesday, 2 June ’26. That’s a 25,229 gain from the previous week that amounts to 37%.
Recent first quarter GDP data reflected that Canada’s economy slipped into a surprise technical recession.
A director at Klarity FX in San Francisco, Amo Sahota, said that the BoC messaging during this week is likely to be closely monitored in order to gauge if those spec positions hold.
The BoC is expected to hold its key overnight rate at 2.25% on Wednesday, 10 June, as well as for the rest of the year. This forecast is according to a majority of economists polled by Reuters. It’s despite rising inflation risks stemming from higher energy prices.
Meanwhile, the price of crude oil, one of Canada’s major exports, pared its earlier gains, settling at 0.8% higher at USD 64.82 (CAD 91.30) a barrel. This was after Iran & Israel said that they had halted attacks on each other.
Meantime, Canadian bond yields were mixed across a steeper curve. This was with a 10-year increase of 2.9 basis points at 3.502%.
Market participants are closely monitoring upcoming economic indicators, including inflation, employment, and retail sales data, for clues about the direction of monetary policy and the broader economic outlook. Rising bearish bets suggest that investors remain concerned about growth prospects, external trade uncertainties, and the potential impact of shifting global market conditions on Canada’s currency performance.
