The Canadian dollar has become one of the most unloved currencies in our universe.
In fact, it is not just unloved versus other currencies. It now sits close to the bottom of our broader asset universe too.
Our Sentiment Matters Aggregate for CAD has fallen to the 4th percentile.
That is extreme.
The point of this note is not to call the exact bottom in CAD. We may not be there. Momentum is still weak and the currency has not yet started to turn.
The point is to do what sentiment analysis is good at:
- Spot when the hurdle for further downside is rising — and when the market becomes more vulnerable to “less-bad” news.
- Identify the prevailing narrative and stress-test it — what is already priced, where is the consensus most confident, and what could realistically force a rethink?
Sentiment & Positioning
We always start with the data.
CAD sentiment has deteriorated sharply alongside the exchange rate. That part is not unusual. Price and sentiment often move together.
What stands out more is the level.
At the 4th percentile, our CAD Sentiment Matters Aggregate (SMA) is no longer just below average. It is at a genuine bearish extreme and marks a sharp reversal over the past three months. As recently as early March the SMA hit a four-year high at its 60th percentile.
For context, the all-time lows in the SMA were in 2024 and most recently in late 2025, preceding a rally in the CAD.
Importantly, at the 4th percentile the SMA has also dropped below the historical buy threshold at the 7th percentile.
An SMA below 7 has historically been followed by average CAD appreciation of 100bp above the historical base line over the next six months, with a 66% hit rate of above-average returns.