Loonie Traders Position for Volatility on Eve of Tariffs
- Cost of hedging against price swings is at highest since 2022
- Trump set to impose 25% tariffs on goods from Canada
Parliament Hill in Ottawa, Canada’s capital city.
Photographer: David Kawai/BloombergThis article is for subscribers only.
Traders are positioning for excessive volatility in the Canadian dollar, in the hours before President Donald Trump is expected to unleash his first wave of US import tariffs.
The cost to hedge against price swings in the loonie over the next week rose to the highest since October 2022 on Friday. It’s at the fifth-most expensive level since 2016, setting aside the pandemic years. Sentiment as captured by so-called risk reversals reached the most bearish on the loonie in nearly five years.