Canadian Dollar

The Canadian Dollar sits in the middle of the pack at #5, scoring -4 — neither clearly strong nor weak. 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 supportive: relative to the other majors, large speculators are leaning in favour of the Canadian Dollar rather than against it. 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. The economy is a concern. Rising unemployment and softening labour data suggest the growth outlook is weakening, which could push the central bank toward easier policy down the line. The trend is positive — the score has gained 6 points over recent weeks.