USD/CAD: Loonie can be excused a minor pause for breath – Scotiabank

The CAD is relatively stable over the weekend. Economists at Scotiabank discuss USD/CAD outlook.

IMM data shows CAD shorts still largely intact

Spot remains close to the 1.32 zone and, after a run of solid gains over the past three weeks, can be excused a minor pause for breath.

Neither soft stocks nor a minor drop in crude oil prices are bothering the CAD at the moment, suggesting a firm undertone persists. However, CFTC data Friday showed that the CAD remains the biggest FX short position held by Institutional and Leveraged Accounts while Speculative traders remain bearish on the CAD and reduced net short positioning only marginally last week. 

The positioning bias against the CAD could provide the CAD with an additional tailwind if investors cover.