The petro-currency landscape is shifting, with the Canadian dollar, Mexican peso, and Norwegian krone strengthening against the trend; short positions on the Canadian dollar face short-squeeze risk.
智通财经2026/08/19 09:56Show original
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- From April to June this year, the US dollar performed strongly among the currencies of oil economies. However, the Canadian dollar, Mexican peso, and Norwegian krone subsequently rebounded, marking a clear shift in market trends.
- Unlike the US, which is directly involved in the Middle East conflict, Canada, Norway, and Mexico are not parties to the conflict. This has led their currencies to be seen as relatively safe alternatives when geopolitical risks rise. The Mexican peso has climbed to its highest level in years, and the Norwegian krone is also close to its recent peak.
- From a policy perspective, rate hikes in Norway have provided support for the krone. Although Canada’s policy rate is lower than that of the US—which in theory is unfavorable to the Canadian dollar—a large number of speculative short positions on the Canadian dollar have accumulated in the market. If the exchange rate breaks upwards, short covering could drive a larger rally.
- On the technical side, the US dollar has shown a downward trend against the Canadian dollar since June 24. The 200-day moving average is around 1.3948 and has acted as resistance throughout August. If the Canadian dollar breaks above this level, a short squeeze could further accelerate its rally.
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