Some Canadian dollar risks

Canadian Prime Minister Justin Trudeau was riding high on the success of vaccinations in the country and opportunistically called an election on Sunday.

The news was long-rumored and leaked late last week so the impact of the announcement is nil.

However the outcome could be a Canadian dollar mover. When Trudeau first floated the election, he was looking a bit stronger. Delta concerns and the usual fatigue with leaders has eaten into his polling lead so a majority isn't certain. The most-likely outcomes though are a Liberal minority (status quo) or a Liberal majority. The market would prefer the status quo so there might be some CAD selling on a majority because that is likely to mean higher taxes, particularly on corporations, the wealthy and capital gains.

Overall though, the path delta, commodities and global growth are going to overshadow the election.

The USD/CAD weekly chart is amazing. Some very clear battle lines there:

Some Canadian dollar risks