The Canadian Dollar is experiencing a dramatic flow reversal ahead of the Bank of Canada’s June policy decision, according to BNY strategist Bob Savage. The shift marks a stark contrast to April when CAD attracted strong buying interest across trading desks. Market positioning suggests traders are moving away from the loonie as central bank uncertainty mounts, with the directional change in flows indicating weakened conviction in Canadian assets.
The reversal comes at a critical juncture as the BoC prepares to announce its latest rate decision, with market participants reassessing their exposure to CAD amid shifting monetary policy expectations. The currency’s recent weakness reflects growing concerns about Canada’s economic outlook and potential dovish signals from policymakers. Traders who maintained bullish CAD positions through April are now facing pressure as momentum flips, creating potential volatility heading into the central bank announcement.
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Traders should reduce CAD long exposure and consider defensive positioning ahead of the BoC decision, as the flow reversal signals deteriorating sentiment that could accelerate if the bank strikes a dovish tone.
Source: FXStreet