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November 30th 2005

Canadian Dollar Unaffected by Political Turmoil

Earlier this week, the Canadian government received a vote of no-confidence, effectively bringing an end to months of allegations that Canada’s ruling Liberal Party was corrupt. As a result, the Canadian Parliament will be dissolved, and a snap election will be held at the end of January. In the past, currency traders have responded to episodes of political uncertainty be selling that nation’s currency. In this case, however, the Canadian Dollar was virtually unaffected. Canada’s economy continues to outperform on the heels of strong exports and lofty commodity prices, and its Central Bank is set to hike interest rates again next week. Reuters reports:

“With underlying support for the loonie from developing M&A deals, the geopolitical risks are still seen as taking a backseat to positive flows and fundamentals,” said [a senior currency strategist.]

Read More: Canadian dollar helped by GDP data, energy prices

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Posted by Adam Kritzer | in Canadian Dollar, Politics & Policy | 1 Comment »

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One Review of “Canadian Dollar Unaffected by Political Turmoil”

  1. Currency Sensitive Darcy Says:

    I am a Canadian exporter of services and products and I am very sensitive to the appreciation of our dollar. In fact I follow currency so much that I started my own currency site.
    Anyway, we often view our dollar as the new “Oil dollar”. As the world’s appetite for oil grows and supply shrinks, I wonder if anything can stop the Canadian dollar. Going forward I think we will see several instances where what normally would cause a sell off has little to no effect on the soaring loonie.

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