The Globe and Mail reports in its Tuesday edition that speculators have turned against the Canadian dollar in a sudden -- and huge -- bearish swing.
The Globe's Michael Babad writes that Bank of Nova Scotia believes it to be the largest-ever shift against the loonie in weekly reports from the U.S. Commodity Futures Trading Commission (CFTC).
The numbers show a net short position in the loonie of $1.8-billion (U.S.), a wrenching shift from a net long of $1.6-billion a week earlier. In terms of contracts, it marked a change to a net short of 24,000 from a net long of 22,000.
"We had struggled to fathom the market's apparent enthusiasm for the [Canadian dollar] in the face of some rather soft price action recently, and the [Canadian dollar] bulls apparently concurred last week," Bank of Nova Scotia currency strategists Shaun Osborne and Eric Theoret said in a report Monday.
"This was, we think, the largest one-week positioning swing in the [Canadian dollar] ever seen (certainly in recent years). We continue to think that caution on the [Canadian dollar] outlook is warranted and that recent data releases have perhaps overplayed the state of affairs in the Canadian economy to some extent."
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