Bullish positioning on CAD is slowly diminishing

USD still enjoys high carry 2.6% vs EUR over, making short USD positioning unattractive. No currency in the G10 FX space offers a higher yield than the dollar.

Market expectations earlier in the year that policymakers will not be able to fulfill their tightening ambitions turned to bets that the next move in interest rates will be down as the economic outlook deteriorated while the trade war saga dragged on.