The Australian dollar is bearing the brunt of global risk-off flows, while the Canadian dollar is finding relative support from surging oil prices. With Brent crude spiking over 11% and the Middle East crisis escalating, Canada’s terms of trade improve, while Australia highly sensitive to China and commodity risk sentiment—continues to suffer.

Add to that the unwind of carry trades and you have a clean divergence trade. CAD benefits from oil and stability; AUD is hurt by macro fragility and China’s persistent slowdown.

SHORT AUDCAD

Jun 16 2025