Canadian Liberals likely to win the election – Commerzbank

Based on the latest polls, it should no longer be too surprising that the Canadian Liberals appear to have won the recent election, Commerzbank's FX analyst Michael Pfister notes.

Slight weakness in the Canadian Dollar this morning is likely

"However, the election victory was quite narrow; currently, all indications point to the Liberals, with 155 seats, only narrowly ahead of the Conservatives with 150 seats, meaning both parties fell short of the 172 seats needed for an absolute majority. The slight weakness in the Canadian Dollar this morning is therefore likely due to the fact that the Liberals now need support from smaller parties to push their agenda through Parliament."

"The most exciting part of the coming months will be how to tackle Canada's major problems. Will the new Canadian Prime Minister-designate, Mark Carney, manage to work out a new trade deal with Donald Trump? And how will he address the underlying productivity problem of the Canadian real economy?"

"The answers to these questions are likely to be crucial for the Canadian Dollar in the coming months. But first, the Liberals can be happy about their astonishing election victory, which was not expected at the beginning of February."