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Canadian election: Liberals victory a negative input for CAD - RBS

Discussion in 'Fundamental Analysis' started by FXStreet_Team, Oct 20, 2015.

  1. FXStreet_Team

    FXStreet_Team Well-Known Member Trader

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    FXStreet (Bali) - Brian Daingerfield, FX Trading Strategist at RBS, notes that a victory for the Canadian Liberals should be interpreted as a negative input for the CAD in the near-term given that the party has pledged to run deficits over the next three years to fund new projects.

    Key Quotes

    "Canadians are at the polls today, and the results of the Federal Election should trickle out throughout the evening."

    "What was a razor thin race as recently as a week ago has given way to a clear frontrunner – Justin Trudeau’s Liberal Party has taken a large lead in the final week over the ruling Conservatives, and a victory for his party may lead to a minority Liberal government with NDP support (without a coalition)."

    "We see the victory for the Liberals as a negative in the near-term for the CAD as the party has pledged to run deficits over the next three years to fund infrastructure projects."

    "The Conservatives, even if they win the most seats, may have difficulty forming a Government without the support of the two main opposition parties."

    "In any event, with none of the three parties likely to gain an absolute majority, political uncertainty could last well beyond the election."
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