Macquarie highlighted the political unrest in Canada as a potential opportunity for investors, particularly in the currency markets.
Following the resignation of Chrystia Freeland and other cabinet officers, Canadian Prime Minister Justin Trudeau faces increasing pressure to step down, with calls for his resignation emerging from within his own Liberal Party.
Members of Parliament from Trudeau’s party have voiced concerns about a lack of unity and are advocating for a change in leadership.
Amidst these developments, there are reports that Trudeau is taking the possibility of resigning seriously and may announce his decision in a scheduled address to Parliament on Monday, before it goes into recess on Tuesday.
This political upheaval has caught the attention of traders, who might be considering strategic long positions in the currency pair.
However, Macquarie advises caution, suggesting that the potential rise of a Conservative-led government could change the investment landscape.
According to the firm, a Conservative government in Canada would likely be pro-growth and could align with the policies of the US’s Trump administration, potentially shielding Canada from US import tariffs.
Macquarie speculates that the installation of a Conservative-led government could lead to the peak in the USD/CAD pair sooner than previously anticipated.
This scenario is based on the expectation that a pro-growth Conservative government would strengthen the Canadian dollar against the US dollar, thus impacting currency market dynamics.
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