Is it time to go long on the friendless loonie?

Bets against the Canadian dollar haven’t been this high in more than a year, and U.S. President Donald Trump’s attacks on Canada’s trade practices are being blamed for the surge.

Trump’s criticism of the dairy, lumber and energy industries, along with the threat to pull out of NAFTA, have grabbed the attention of currency traders, who have pushed the net speculative short position on the loonie to 44,122 futures and options contracts.

Not since Feb. 16, 2016 have the “sharks been sniffing so much blood,” according to David Rosenberg, chief economist and strategist at Gluskin Sheff + Associates.

Concerns about brewing issues in the mortgage market have also weighed heavily on the currency, while lower oil prices and Friday’s soft GDP report haven’t helped matters. Year-to-date, the loonie is the worst-performing major currency versus the U.S. dollar.

“This is epic,” Rosenberg said in his daily Breakfast with Dave report. “It truly has no friends. Which is maybe why, being a contrarian at heart, I like it now.”

Trader positioning in the Australian dollar, another commoditysensitive currency, demonstrates how little love the Canadian dollar is getting. The net non-commercial long position on the Aussie dollar is nearly 40,000 contracts — almost a six-month high.

The Mexican peso has moved into a net long position of 16,150 contracts, which hasn’t been seen in almost three years, and the Brazilian real has a long position of 12,230 contracts.

“If there is an anomaly out there, it is definitely the excessive bearish sentiment and positioning at the current time on the Canadian dollar,” Rosenberg said. “A short squeeze for whatever reason, would go a long way towards generating a counter-trend rally.”

The loonie hit a 14-month low on Friday, and has been showing tentative signs of stabilizing since. In late trading Tuesday, one loonie bought you 72.88 US cents, down nearly four cents from its 2017 peak in February.

However, the risk remains to the downside as interest rate differentials continue to work against the loonie, according to Shaun Osborne, chief FX strategist at Scotiabank. He pointed to Bank of Canada governor Stephen Poloz’s speech in Mexico City on Thursday, which is expected to address the uncertainties in recent policy statements from the central bank.

Osborne warned that this could lead to additional pressure on the loonie via additional negative sentiment. “Measures of implied Canadian dollar volatility are rising steadily, and risk reversals are pricing in a relatively high premium for protection against downside risk,” the strategist told clients. “The absence of near-term domestic releases leaves the Canadian dollar vulnerable to the broader market tone, and we remain bearish.”

The loonie has been unable to take advantage of the U.S. dollar’s weakness this year, as the tradeweighted greenback posted its fourth consecutive monthly decline in April.

Improving global economic data has raised the prospect of other major economies following the U.S. Federal Reserve on the path to interest rate hikes.

However, if upcoming Canadian data demonstrates a sharp moderation in growth following the blockbuster first quarter, National Bank Financial economist Krishen Rangasamy thinks the loonie could remain under pressure over the coming months. “But not all is bleak for the Canadian dollar,” he said. “We expect a more hawkish tone from the Bank of Canada later in the year in response to a second half rebound and the need to cool a hot housing market.”

As a result, Rangasamy pushed forward his forecast for when the loonie will hit a trough by three months to the third quarter.

“That forecast, however, assumes U.S. trade policy does not take a turn for the worse,” he said.