Reuters: Canadian Dollar Consolidates Prior Day's Gains as Election Looms
The Canadian dollar steadied after earlier gains, supported by hopes for a fresh outlook following Prime Minister Trudeau’s resignation. However, the loonie remains within a six-week losing streak as widening rate spreads favor the U.S. dollar, hitting a 135bps cycle high. Signs of USD overvaluation persist, but seasonal trends have turned negative for the CAD, and the Bank of Canada’s easing stance continues to weigh. Political shifts could help address Canada’s productivity lag, while this Friday’s employment report presents a key data risk point for traders.
"A change in the leadership in Canada is not a long-term negative for the loonie," said Amo Sahota, executive director at Klarity FX in San Francisco.
"People are looking at a new Conservative government which would probably be more pro-business, maybe less spending in there as well."
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