08:11 AM EST, 12/18/2024 (MT Newswires) -- Rosenberg Research said it has been bearish on the Canadian dollar (CAD or loonie) for a long time and this is one call that proved to be correct.

Perhaps it is time for a rethink at current levels -- at C$1.4330 it's the weakest it has been since March 2020, noted Rosenberg Research.

With Canada unveiling border plans to avert United States President-elect President Donald Trump's tariff threat, it seems obvious now that enough is being done to placate the Trump team, so this 25% tariff threat is dissipating, stated Rosenberg.

A less dovish US Federal Reserve is already priced in and the Bank of Canada has switched its cadence to a go-slow approach, it pointed out. The incoming data have been soft but are beginning to show some stability -- as in, no longer deteriorating.

The political turmoil in Canada's government is a current cloud, but anything that brings about a change in government to a more business and market-friendly landscape under the Conservatives should be construed as a longer-term positive for the beleaguered loonie, added Rosenberg.

Lastly, negative sentiment and positioning on the Canadian dollar have hit extreme levels -- the net speculative short positions on the CME have doubled these past two months to a near-record 180,749 net bearish bets, or a fifth most on record). Fodder for the contrarian crowd, added Rosenberg.