Canadians are voting today in an election that's been dominated by antagonism and threats of annexation from the President of the United States.
In general, the stakes are low for the Canadian dollar. That's in large part because the Liberals switched leaders to Mark Carney and he's moved the Liberal platform much closer to the Conservatives, so much so that a talking point in the campaign was that he was stealing the Conservative platform. Carney is also a former central banker and that has the market confident he won't do anything particularly damaging to the economy.
The results of the election should be clear between 9-11 pm ET and note that there are no exit polls in Canada, so we will have to wait for the votes to come in. This one could come down to what happens on the west coast so that could make for a long night.
I tend to think that some stability would serve CAD best at the moment and that looked like a Conservative majority a few months ago but the polls made a dramatic shift to the Liberals after the leadership change and Conservatives bungling the message with Trump.
Here are outcome probabilities based on polling numbers and compiled by the CBC.
The outcome I believe that could offer some downside in the loonie (in the 50-120 pip range) is a Liberal minority held up by the NDP. That would essentially extend the current status quo and leaves the Liberals at the mercy of the left-leaning NDP.
Now that outcome could be mitigated if the NDP leader resigns later, something that would probably buy a year of free reign for the Liberals but would still constrain them from taking any strong steps to boost domestic productivity.
This article was written by Adam Button at www.forexlive.com. Read More Details
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