According to online reports, TD Securities believes that the US dollar will fall further because Canadian investors, as one of the largest holders of US stocks, are under pressure to increase the currency hedging ratio of US dollar assets. "The safe-haven appeal of the U.S. dollar has declined since the beginning of the year, leading to increased demand for these funds to hedge their long exposure to U.S. assets," TD Securities team Jayati Bharadwaj, Mark McCormick and Linda Cheng wrote in a report on Friday. A further decline in the dollar "will further encourage Canadian investors to adjust hedging policies, which in turn may put further downward pressure on the currency pair." In the first half of 2025, the Canadian dollar has risen more than 5% against the US dollar, setting the best start in nearly a decade. TD strategists predict that the Canadian dollar will rise further in the future. They expect the Canadian dollar to rise to 1.31 against the U.S. dollar by December, which will be its strongest level since 2022 and about 4% higher than the current level of around 1.3665. TD's team estimates that the hedging ratio of positions held by Canadian pension funds, some of which have clear policies to fully hedge U.S. assets, is about 10% to 15%. Overall, Canadian investors hold approximately $1.8 trillion in U.S. stocks. Analysts wrote that a marginal 5% increase in hedging ratios could put the U.S. dollar under selling pressure of about $90 billion against the Canadian dollar.